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New Era Economics 



PRESENTING A 



RATIONAL THEORY OF VALUE 



BY 



JOHN FREDERICK BROWN, B. S. 



Published and For Sale by the Author 

529 EAST NEW YORK ST., INDIANAPOUS, IND. 

1916 



PRICE: 
IN PAPER COVER - - .30 
CLOTH BOUND - - - |1.00 



RIGHT OF TRANSLATION RESERVED 



^T 

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Copyright 1918 
By JOHN F. BROWN 



NOV 151918 



Pr*M of Harrington Ac Folgcr 
Indianapolis, Ind. 






CONTENTS 

Part I. Introductory. 
Chapter. Page. 

I. Scope and Function of Economics 5 

Part II. Value. 

II. General Value Notions. Anderson and 

Davenport on Value 36 

III. Value Based on Labor of Standard Effi- 

ciency 51 

IV. Economic Status of Professionals and 

Artists 66 

V. Equal Value of, and Equal Compensa- 
tion FOR All Kinds of Skilled Labor — 74 

VI. Equal Value of Skilled and Unskilled 

Labor 87 

VII. No Labor Without Skill. Present Ten- 
dency Toward Equal Compensation 115 

VIII. Ultimacy in Value. Summary of Value 

Theory 127 

Part III. Application. 

IX. Application of Value Theory. Some Ob- 
jections Answered 143 

X. New Era Society. Further Applications 

of Value Theory 162 



PART I. 

INTRODUCTORY. 

Chapter I. 

Scope and Function of Economics.* 

Any fairly well informed person who takes 
up the study of economics must be struck by the 
variety and the conflicting character of doctrines 
presented by different schools of political econ- 
omy; and he could not help noticing the differ- 
ence of viewpoint, taken by various writers, as 
to what is the proper function and scope of the 
science of political economy; a difference which 
necessarily must affect the deductions and the 
teachings of the respective writers in a marked 
degree. One class of economists may be credited 
with a distinct desire to give a moral side, or 
content, to their theories. These were unques- 
tionably men of strongly humane and kindly 
instincts, men who saw the widespread misery of 
the greater number of their fellow beings, the 
almost universal poverty and degradation of the 
masses, largely self-inflicted perhaps, but more 
largely imposed by circumstances, by customs, 
and by institutions over which the victims have 
no control ; such as the misfortune of sickness or 



* Any reader of this book who is versed in economics is 
advised to turn at once to Part II, which presents the au- 
thor's value theory; since that is the part which, if any, would 
be of interest to such a reader. 



6 SCOPE AND FUNCTION OF ECONOMICS. 

of native incapacity, of enforced idleness, pre- 
cariousness of work, and meagerness of com- 
pensation, especially in the case of unskilled 
labor. Contemplating this widespread suffer- 
ing, these large - souled humanitarian men took 
thought and set about enquiring the cause, and 
endeavored to find remedy and means of better- 
ment. To this class unquestionably both Adam 
Smith and John Stuart Mill belong; for, though 
they may not have made any explicit statement 
to that effect, yet, it seems to me that a distinct 
undertone runs through their books, indicating a 
strong desire to be helpful; to improve condi- 
tions; to abate evils and errors which result in 
human suffering; and to assist in bringing about 
a nearer approximation to economic justice than 
obtained in their day. Besides being economists, 
both ^vere moral philosophers and writers on 
morals; Adam Smith being a teacher of such, as 
Professor of Moral Philosophy in Glasgow Uni- 
versity. 

In this class of humanitarians can also be 
listed several American economists. Among 
these is Henry C. Carey, author of Principles of 
Social Science, on almost every page of which 
can be noticed his intense desire to teach that 
which he believes essential to human welfare. 
This is admirably expressed in the preface to 
the one volume manual, into which his three 
volume work has been condensed by Kate Mc- 
Kean (1864). This, in part, reads as follows: 

''Why do misery and crime exist? Why 
when so large a portion of the earth is yet unoc- 
cupied are human beings suffering for food, and 



SCOPE AND FUNCTION OF ECONOMICS. 7 

crowded together in unwholesome dens, to the 
sacrifice of decency, comfort and health? Why 
does one nation export food of which its own 
members are in need, while another sends its 
manufactures throughout the world although 
hundreds at home are scarcely clothed? Why 
are nations and individuals seen elbowing each 
other, so to speak, for room to live? Why are we 
called on to see everywhere an uneasy jealousy 
among communities, each watching with an un- 
friendly eye the expansion of the other — the 
strong ever encroaching upon the rights of the 
weak? Why should the chief European nations 
wage a ceaseless warfare against the industry 
and prosperity of the world at large? In short, 
what is the cause of the measureless woe that 
exists in this fair world which the Creator pro- 
nounced to be very good?" 

"Who that has ever reflected upon human 
affairs has not asked himself these questions, has 
not at some period of his life sought to solve 
these problems? Is there no law regulating hu- 
man affairs ? Is there no principle, broad, simple, 
comprehensive, which can account for all this 
confusion, and reconcile these contradictions ? If 
so, where is it to be found, to whom has it been 
revealed? Has the Newton of social science not 
yet appeared?" 

Francis Wayland, Professor of Economics and 
Moral Philosophy, and President of Brown Uni- 
versity, prepared a textbook in the preface of 
which he says : "The principles of political econ- 
omy are so closely analagous to those of moral 
philosophy that almost every question in the one 



8 SCOPE AND FUNCTION OF ECONOMICS. 

may be argued on grounds belonging to the 
other." 

Wayland never loses a certain moral attitude 
toward his subject, and he teaches it as a means 
to human welfare; and I mention him here in 
order to list him in the class of humanitarian 
economists. 

Henry George, whom some would deny a 
place among economists, is another American 
philosopher and writer on economics who heart 
and soul is intent on abolishing poverty, and who 
sought to establish unfailing employment and 
general welfare by destroying monopoly owner- 
ship of land through his single tax scheme. 

In the class of humanitarians also belongs 
Richard T. Ely, of Wisconsin University. He 
says, Chapter I. of his Outline of Economics : 

"Animating the entire subject, blended of course 
with the love of truth for truth's sake common to 
all sciences, is the persistent hope that by syste- 
matic study we may eventually abolish the mate- 
rial poverty which deadens and dwarfs the lives 
of millions of our fellows. Economics is a 
science, but something more than a science; it is 
a science shot through with the infinite variety 
of human life, calling not only for systematic, 
ordered thinking, but for human sympathy, 
imagination, and in an unusual degree for the 
saving grace of common sense Sat- 
isfaction of social need, not individual profit, is 
the objective point of the science." 

"Economics treats of man; but the supreme 
importance of man in the study of wealth has 
not always been appreciated by those who have 



SCOPE AND FUNCTION OF ECONOMICS. 9 

expounded the science. Too often they have 
considered man simply as a producer of wealth 
'by whom' the necessaries, conveniences, and 
luxuries of life are created, whereas the infinitely 
greater truth is that man is the one 'for whom' 
they are produced." 

'*We do not mean to say that the whole prob- 
lem of human development is the subject of 
economics, but simply that manhood, rounded 
human development, is the goal of all social 
sciences, and none must consider their subject 
so narrowly as to exclude that object." 

These brief passages from Prof. Ely's first 
chapter clearly indicate his humanitarian attitude, 
and his idea as to the scope of economics and its 
function in the life of mankind ; and this puts him 
in the class of economists that I speak of as 
humanitarians, as distinguished from the class 
that might be called materialistic, if not mam- 
monistic, as putting things above men, and wealth 
above welfare. This latter class seems to con- 
sider it of the highest importance for a nation to 
figure large in financial and economic statistics; 
to secure important trade concessions in distant 
lands ; to hold great quantities of foreign securi- 
ties; and, especially, to capture and dominate a 
large share of foreign markets, in order that 
wealth may accumulate, though men decay; for- 
getful of the fact that such a land fares ill, as 
the lamented Oliver Goldsmith declared. 

As examples of this class of economists I would 
mention F. A. Walker, who, in his Political Econ- 
omy, Briefer Course, Chapter I., says: "Political 
Economy has to do with no other subject what- 



10 SCOPE AND FUNCTION OF ECONOMICS. 

ever than wealth. The economist may also be 
a social philosopher, a moralist, or a statesman; 
but not on that account should the several sub- 
jects be confounded" (page 7). "AH those things 
which some economists have called intellectual 
capital, and those which by analogy might be 
called physical capital, are to be excluded from 
the category of wealth. These have seemed to 
be things so desirable in themselves, so much to 
be preferred in any right view of human wel- 
fare, that excellent writers have not been able 
to bring themselves to leave them out of the field 
of economics. But political economy is the sci- 
ence, not of welfare, but of wealth'' (page 10). 
"It cannot too strongly be insisted on, that the 
economist, as such, has nothing to do with the 
question, what men had better do; how nations 
should be governed; or what regulations should 
be made for their mutual intercourse" (page 
16). "Great confusion has been engendered by 
writers on economics wandering off into discus- 
sions of political equity. The economist, as such, 
has nothing to do with the question whether 
existing institutions, or laws, or customs, are 
right or wrong. His only concern with them is 
how they do, in fact, affect the production and 
distribution of wealth" (page 17). 

These excerpts sufficiently indicate Mr. Walk- 
er's viewpoint as to the scope and function 
of economics, and a like attitude of mind is evi- 
denced by Prof. J. L. Laughlin in the textbook 
on economics which he prepared for his classes, 
and which is a revision and condensation of 
Miirs Principles of Political Economy. This 



SCOPE AND FUNCTION OF ECONOMICS. ii 

revision was published in 1884, and in it Pro- 
fessor Laug"hlin seems to take particular pains 
to correct the supposedly mistaken humanitarian 
attitude of Mill. But in some of Laughlin's later 
writings, notably in his little volume entitled 
**Latter Day Problems," published 1909, his own 
attitude is changed very much toward a distinctly 
humanitarian leaning. 

The greater number of English economists, 
especially of the ''lassez faire" school. Senior, 
Fawcett, McCulloch, Mallock, all maintain an 
attitude of indifference and aloofness from hu- 
mane reform ideas, as having no connection with 
economics; and they have formulated that "dis- 
mal" science against which Ruskin and Carlyle 
thundered their denunciations. Carlyle, in Past 
and Present, Book III, chap. 9, p. 228, says: 
"The saddest news is that we should find our 
national existence depend upon our selling manu- 
factured cotton at a farthing an ell cheaper than 
any other people ; a most narrow stand for a 
great nation to base itself on. Think of a nation 
which fancies it must die if it do not undersell 
all other nations to the end of the world!" And 
on page 326: "It is for others to know in what 
specific ways it may be possible to interfere, 
with time-bills, factory-bills, and other such legis- 
lation, between workers and employers ; the pres- 
ent editor (Carlyle) knows not; he knows only 
and sees, what all men are beginning to see, that 
legislative interferences, quite a number, are in- 
dispensable, that the lawless anarchy of supply 
and demand can no longer be tolerated." See 
also Ruskin's "Unto this Last''. 



12 SCOPE AND FUNCTION OF ECONOMICS. 

I have begun this essay by pointing out that at 
the very threshold of the science, at the initial 
question: what is it about, and for what pur- 
pose, economists are a house divided against it- 
self. And in chapter II, I shall show that on the 
question of value economists are very much at 
sea; so much, that several have openly declared 
the value question to be an unsolved problem. 
Since this essay must be brief, and mainly de- 
voted to a discussion of what I have termed a 
rational theory of value, which is presented in 
Part II, I will here but lightly touch on several 
fundamental errors which have more or less 
direct connection with current theories of value. 
My contention is that present value concepts and 
theories are incomplete, and wholly inadequate 
for making them what they should be — the basis 
and foundation of the entire economic science. 
This insufficiency of the generally accepted value 
concepts is due, I contend, to several funda- 
mental errors; and to false ideas concerning the 
relations of man to man, the rights and duties of 
individuals, and the claims and duties of society. 
These errors and false notions have naturally 
been shared by writers on economics, and are 
reflected in their value concepts. But be it re- 
membered that much of what we of today speak 
of as errors and false ideas, in times past was 
accepted as truth and as sound sense, and in one 
way indeed was such. It is today a mere com- 
monplace to say that in the passage of time, along 
with industrial, political, and intellectual progress, 
the human race undergoes a continuous change 
of viewpoint; change in its sense of right and 



SCOPE AND FUNCTION OF ECONOMICS. 13 

wrong; and in its general notions as to man's 
place in nature, as well as to his place in the 
social fabric. Summing up the total of senti- 
ments, ideals, desires, beliefs, aspirations, and 
aims of any given time and place, and calling 
that the spirit of that age or time, all individuals 
living at such time and place are largely domi- 
nated by that spirit; especially is the written 
thought marked by the spirit of its respective age, 
at least that part of the written thought which 
finds acceptance and currency. And naturally the 
writers on economics were, generally speaking, in- 
fluenced by, and reflect this spirit of their age in 
their theory of value, as well as in their economics 
in general. No value theory, evolved under the 
influence of a society based on slave labor, could 
prove acceptable in a free labor, or wage labgr, 
age. The undisputed private ownership of land 
gives a basis for rent, and for a theory of rent, 
and affects current theories of value ; but the rent 
theory will collapse, and value theories will be 
modified, should private ownership of land be 
abolished or materially restricted. No theory 
of value can obtain currency or force if it con- 
flicts with general notions and customs; it must 
accord with the spirit of its age. 

The value theory that I shall here present could 
not possibly have been accepted before these lat- 
ter days, and it remains to be seen whether the 
times are now ripe for its acceptance. I hope so, 
for I verily believe that economic, intellectual and 
moral progress is halted because of the absence 
of a true and socially vitalizing theory of value. 
Moreover, political economy is today without an 



14 SCOPE AND FUNCTION OF ECONOMICS. 

undisputed theory of value; confessedly, value is 
still a disputed question among economists, and 
by some acknowledged as an unsolved problem. 

To solve this problem, and to point out erro- 
neous premises which hinder the solution of this 
problem, is the task I have undertaken in this 
essay. The first of these false premises, that 
economics has nothing to do with welfare but 
only deals with wealth and nothing else than 
wealth, has already in part been discussed; and 
it was pointed out that here, right at the begin- 
ning of the study, there is dispute and disagree- 
ment among present as well as among past teach- 
ers of economics, depending upon the personal 
leaning and viewpoint of the respective writers. 
This divergence of opinion shows that, strictly 
speaking, economics is not a science ; that its dicta 
are expressions of opinions, rather than of proven 
or provable facts; and that it is called a science 
by courtesy and for convenience. It is a study 
and discussion of theories rather than a science. 
Economics is not in the class of exact sciences like 
mathematics, chemistry, and physics, the propo- 
sitions of which can be proven on the blackboard 
or demonstrated by experiments in the laboratory. 
The most that can be done with the propositions 
of economics is to reason them out to a convinc- 
ing degree of self-evidency, such as will satisfy 
the average intelligence; and any subsequent ex- 
periment requires the consent of whole communi- 
ties, and usually takes decades of time to prove 
out. It is therefore quite natural that the opin- 
ions of economists should vary, and vary widely, 
according to personal idiosyncracy ; and it would 



SCOPE AND FUNCTION OF ECONOMICS. 15 

consequently be foolish to judge harshly of econo- 
mists. And since in the nature of the case I 
shall have to criticize their reasoning and reject 
many of their conclusions, I take occasion here 
to declare that I hold these men in as high regard 
as any other set of men who have labored and 
spoken according to their best knowledge and 
belief; and that nothing I may have to set down 
against their teaching is set down in a spirit of 
personal detraction, but solely to combat what 
I claim to be erroneous belief. 

Let us resume then the discussion of what is, 
in reason and common sense, the true scope and 
purpose of economics. This is so admirably set 
forth by Professor Ely in Chapter I. of his Out- 
line of Economics, from which I have quoted a 
few passages, that I feel unable to add anything 
worth while to what he there has said. But it 
would hardly be proper here to reproduce that 
entire chapter ; and inasmuch as some readers of 
this essay may not have ready access to Profes- 
sor Ely^s work, I shall, in my own way, present 
such arguments as are at my command, to con- 
vince them that those who declare that econom- 
ics has nothing to do with welfare but only deals 
with wealth are wrong; that they start wrong, 
at the very beginning of their inquiry, and that 
they necessarily must end with various erroneous 
conclusions. 

For whom are houses built; roads and streets 
made; ships, railroads and bridges built; crops 
sown and harvested; schools, libraries, and other 
institutions established ? These questions answer 
themselves. It is evident to the commonest intel- 



i6 SCOPE AND FUNCTION OF ECONOMICS. 

ligence that all these works of man are for man, 
for his use and benefit; to give him food, cloth- 
ing, shelter, comforts, education and recreation.* 
And if, because of some hitch in the social 
mechanism, these things, the constituents of 
wealth, at some points accumulate to a glut ; and 
if this excess of wealth condemns the very pro- 
ducers of that wealth to unemployment and 
consequent want and distress, that simply shows 
how badly economists have blundered. It shows 
how poorly they have done their work, how they 
have been groping in the dark, and how they have 
failed to teach the world sane and wise economics. 
The opinion that things constitute a considera- 
tion superior to man, superior at least to the 
common man, the lower ranks of laborers; that 
the things of wealth, in absolute and unques- 
tioned control of private owners, must be and 
are the foremost consideration, regardless of 
public welfare or distress; such an opinion can 
be accounted for only on the ground that men 
have been in the habit of beholding just that state 
of affairs for many generations, and therefore 
could not believe that anything else was possible. 
The land and its yield belonged to the king, the 
nobles, the squire or other proprietor; and these 
exercised an unquestioned right to dispose of the 
crops as they thought best for their own interest 
or pleasure; so also did the manufacturer and 
the merchant with their wares. The welfare of 
the populace was a matter of small concern; the 



* Even religion and the church is for man. Jesus said: 
The Sabbath was made for man, and not man for the Sab- 
bath. Mark 2:27. 



SCOPE AND FUNCTION OF ECONOMICS. 17 

utmost that was considered feasible in their be- 
half was the establishment of almshouses. But 
to increase the wealth of kings and proprietors, 
and the profits of manufacturers and merchants, 
that engaged the thought and attention of early 
economists; and some present day ones have not 
outgrown that mental attitude. Possibly this 
despotism of private ownership and private inter- 
est was an historical necessity; was the right 
thing at the right time; right because neces- 
sary; right because comporting with the then 
existing state of general human development. 
But right no longer than necessary; and neces- 
sary no longer than till general human develop- 
ment reaches a stage where man is fit for coopera- 
tion, for brotherliness instead of antagonism, fit, 
in a word, for the cooperative commonwealth. 

I quote here, as bearing upon this particular 
thought, a passage from Mill, Principles of Po- 
litical Economy, p. 19: 'It often happens that 
the universal belief of one age of mankind — a 
belief from which no one was, nor without an 
extraordinary effort of genius and courage could, 
at that time be free — becomes to a subsequent 
age so palpable an absurdity, that the difficulty 
then is to imagine how such a thing could ever 
have appeared credible.'' 

But I shall not pursue this line of thought 
further; suffice it to say that the true philosopher 
and teacher of mankind is not content to describe 
things as they are, but labors to reason out how 
things ought to be. Likewise, the forward look- 
ing economist will not merely describe the eco- 
nomics that was and that is, but also the econom- 



i8 SCOPE AND FUNCTION OF ECONOMICS. 

ics that ought to be and will be ; and he who puts 
men above things, and welfare above wealth, that 
economist has his face set in a direction which 
unquestionably is the right one. 

Besides this initial error of a false idea as to 
the scope and mission of political economy, there 
are several other errors, shared in greater or less 
degree by practically all accredited economists, 
errors, which have more or less of a bearing upon 
their value concepts and their theories of value; 
inasmuch as the value theory of any economist 
is built up of and embodies most of his funda- 
mental economic notions. Some of these errors 
connect closely with the initial one regarding the 
proper function of economics; others, pertaining 
to wages, capital, labor, supply and demand, are 
of a class that I call half-truths, being made up 
part of truth and part of error, and which, just 
because they contain partial truths, are the more 
perversive, since they mislead men into accepting 
them as complete truths. Looking back at the 
early economists of the eighteenth century, it 
seems that they assumed the economic and social 
conditions of their time to be fixed and unchange- 
able. They described and explained things as 
they found them ; and it did not occur to them to 
describe things as they might be improved, and 
how conditions might be made better, juster, and 
humaner for the lowly masses. Hence their so- 
called science became largely an attempt to justify 
as necessary and inevitable all social wrongs, op- 
pressions, and despotisms. The absolute despot- 
ism of kings and nobles was accepted as natural 
and inevitable. And when later the despotism 



SCOPE AND FUNCTION OF ECONOMICS. 19 

of aristocracy was superseded by the despotism 
of wealth, of private ownership of natural re- 
sources, the despotism of private control of the 
means of life and labor, then this was also ac- 
cepted as natural and necessary; and all the evil 
consequences to the disinherited masses, engen- 
dered thereby, were likewise apologized for as 
inevitable and beyond remedy. And we see that 
especially the so-called orthodox lassez faire 
school of economists of the nineteenth century 
were mainly busy with explaining as unavoid- 
able all the industrial misery of their time; the 
poverty and wretchedness of the lowly toilers on 
farm and field, in mill and mine ; their starvation 
wages ; their slum habitations ; and the toil slavery 
of their women and children. Economists apolo- 
gized for all these things as being inevitable, and 
therefore justified; and also as necessary for the 
commercial prosperity and glory of England, 
since she was by these means able to undersell 
other nations in the markets of the world. This 
reprehensible work of economists is a direct out- 
growth and consequence of the false idea of put- 
ting wealth above welfare, and things above men, 
instead of making man and his welfare the end 
and aim of all work and effort, of all knowledge 
and philosophy. And economists who fail to do 
this, who mistakenly follow the opposite course, 
thinking thereby to give their subject a truly 
scientific character, merely prove themselves to 
be blindly groping pedants; and the probability 
is that they may soon find themselves and their 
alleged science relegated to the limbo of things 
discarded and forgotten. 



20 SCOPE AND FUNCTION OF ECONOMICS. 

Another error, coincident with the foregoing, 
was the supercilious mental attitude of the edu- 
cated and the ruling classes toward the common 
man and the laborer. What rights had these 
a claim to anyhow, in society and in life? To 
what consideration, if any, were they entitled? 
What were they here for on this earth? Owing 
to their numbers, their interests should have had 
first place in the consideration of public policy 
and endeavor; but it was not even conceded that 
they might claim to be here for their own sake 
and for their own welfare. They are here to 
provide soldiers, thought the rulers. They are 
here to produce wealth, subsistence and luxuries 
for us, said the land owners, the bankers and the 
captains of industry and their spokesmen, the 
orthodox economists. They were regarded by 
economists as producers of wealth with much the 
same feeling and consideration with which a 
farmer regards his pigs as producers of pork. 
Even the best of economists, such well-meaning 
men as Adam Smith and J. S. Mill, in their rea- 
soning treated the laborer as a commodity. Per- 
haps they did this somewhat unconsciously, but 
they did so none the less when using the terms 
"labor" and "laborers'* synonymously. Mill, in 
his "Principles," p. 554, has this statement: 
"There are commodities which, though being 
capable of increase and decrease to a great extent, 
their value always depends upon demand and sup- 
ply. This is the case in particular with the com- 
modity labor." When speaking of the supply or 
increase of labor, they mean the supply or in- 
crease of laborers, of men. These two, labor, 



SCOPE AND FUNCTION OF ECONOMICS. 21 

the activity, and the laborer, he who exerts that 
activity, are so conjoined they cannot be sepa- 
rated in actual life, and they are so identical in 
economic reasoning, that when you make a com- 
modity of one, the other becomes a commodity 
also. 

By making labor, and with it the laborer, a 
commodity, economists have in their reasoning 
reduced the laborer to a thing, a soul-less, will-less 
thing; or, at best, a mere work animal without 
selfhood and conscious life purpose; a creature 
to be used and directed by others as they see fit, 
and as suits their advantage. I said economists 
have in their reasoning reduced the laborer to 
this; perhaps it would be more correct to say 
that they found him thus, and that they left 
him so, as far as their science is concerned. They 
assigned to the laborer's life hardly anything 
beyond this : to work, eat, sleep, and to propagate 
his species, so as to keep up the supply of laborers 
somewhat in excess of the actual need; and they 
deduced a law of subsistence wages, the so- 
called "iron law of wages,'' which was supposed 
to cut oi¥, automatically, the excess supply of 
laborers, by a process of slow starvation. I do 
not know whether, as an actual fact, men in any 
great number were ever reduced to such a low 
standard of life as these economists would make 
us believe is the natural and inevitable level to 
which competition and economic self-adjustment 
must necessarily bring the laborers. Perhaps the 
conditions in England during the first half of 
the nineteenth century were largely so, as this 
seems indicated by various utterances in the 



22 SCOPE AND FUNCTION OF ECONOMICS. 

literature of that time; such as: Hood's Song 
of the Shirt, Shelly's To the Men of England, 
Tennyson's Maud; by novelists like Dickens; 
and by essayists like Ruskin and Carlyle, who 
scathingly criticized the political economy of 
their day, which knew no remedy and which 
called these conditions inevitable. But, certainly, 
in no Anglo-Saxon country do any such condi- 
tions obtain today, nor in any of the advanced 
European countries; and any political economy 
which assumes this bare subsistence as a law of 
wages, and on such a labor cost bases its theory 
of value, I hold is utterly absurd, and absolutely 
out of date. 

We find then that the economics of those days 
was merely descriptive of what it saw, rather 
than instructive as to better ways and better 
things that might be; that the advance made by 
man in his economic condition was made with- 
out help from this alleged science, made rather 
in spite of the political economy of that period 
and the pronouncements of its professors and 
teachers. If political economy cannot instruct 
the race how to establish general welfare; how 
to eradicate that socio-economic disease poverty; 
but only can describe it and tell us it is here, then 
of what use is it? It must stand as discredited 
as would stand a medical science which did not 
endeavor to cure disease, but was content merely 
to describe it. 

While the Malthusian theory of a bare sub- 
sistence condition for labor is contrary to the 
general facts of human life in modern times, and 
repugnant to reason when presented as a funda- 



SCOPE AND FUNCTION OF ECONOMICS. 23 

mental principle in economics, as something 
natural and unalterable, it is none the less a 
partial truth; and it has withstood all the fierce 
attacks made upon it on the mistaken assumption 
that it was wholly false. The trouble was that 
the opponents of this theory, that population tends 
to outrun subsistence, did not realize that it was 
a contingent truth; that it contains elements of 
truth as well as of error. And instead of sepa- 
rating the true from the false, they wasted their 
words in vain attempts to disprove it in toto, 
largely on sentimental and religious grounds. 
For, granting the assumed premises of the Mal- 
thusian theory, that the mass of men exist on a 
plane of life like unto an animal, to eat, sleep, 
and to gratify their sexual impulses, regardless 
of consequences ; and that as a result they propa- 
gate and increase in numbers to the maximum 
bearing capacity of their females ; granting these 
premises, the Malthusian conclusion, that the 
number of men will tend to exceed the sources 
of subsistence is undeniably true. This is true at 
least in all countries outside the tropics, in the 
very countries and nations for whom the science 
of economics was formulated. But the moment 
these premises are proven to be false, or proven 
to be no longer true, that moment the Malthusian 
subsistence and population theory with all its 
attendant consequences falls to the ground. Now 
I contend that these premises have largely ceased 
to exist as an actual and general fact of ^human 
life, and that they are disappearing more and 
more from day to day; hence, the Malthusian 
theory of population and subsistence limit has 



24 SCOPE AND FUNCTION OF ECONOMICS. 

become obsolete, has lost validity; and with this 
has been lost the basis of some of the fundamental 
ideas of conventional political economy. 

It is pertinent to remark, in connection with 
the elimination of the premises upon which the 
Malthusian theory rests, that economists, as such, 
are guilty of a sin of omission ; inasmuch as they 
have done nothing, as far as I have been able 
to discover, toward promoting that elimination, 
in any direct and courageous way, such as 
would become teachers and leaders in human 
progress. It is true, they have declared that ex- 
cessive numbers of laborers cause low wages, and 
a low value of labor, because of the excessive 
supply; but this has been done more in justifi- 
cation of low wages, rather than as a warning to 
laborers to keep down their number. I am not 
aware of any economist who has advocated re- 
striction of immigration, import of laborers; 
rather they all advocate mobility of labor. It 
should flow readily to such places and to such 
employments where wages are higher, they say, 
unmindful of the fact, that, according to their 
own reasoning, such an influx of labor would de- 
press wages in those places and employments. 
While they vaguely hint at the imprudence of a 
high birth rate, none of them distinctly advises 
a birth rate controlled by deliberate, preventive 
means. The gratuitous advice to the lower 
orders to restrain the increase of their numbers 
by practicing sexual abstinence is as useless and 
as silly as it would be to tell them to meet a food 
shortage by eating only one meal a week. It 
may be noted, however, that a controlled birth 



SCOPE AND FUNCTION OF ECONOMICS. 25 

rate is becoming the practice in all leading coun- 
tries, especially among the more enlightened 
classes in those countries; and the time is per- 
haps not distant when political economy will have 
to fall in line and take a definite stand on this 
very important detail of general human welfare, 
as well as one on the related question of immi- 
gration restriction. 

Closely connected with the false notion con- 
sidered in the foregoing paragraphs, the notion 
that classes labor as a commodity and reduces 
the laborer to a mere thing, is another false no- 
tion, and a false mental attitude toward the la- 
boring masses on the part of their advisers and 
would-be friends, a sort of patronizing master 
and servant attitude. I do not assert that recog- 
nized economists hold such an attitude; it is true 
rather of the acrimonious critics of conventional 
and accepted economics, such as Ruskin and Car- 
lyle, and is shown in their rather phantastic ex- 
hortations. The proposals of Ruskin and Car- 
lyle, if the latter can be said to have submitted 
proposals, are distinctly characterized by a patri- 
archal master and servant sentiment. Both take 
the master class, the rulers of political, financial 
and business affairs, to task, for not assuming a 
patriarchal and providential attitude toward the 
laborers; and for not shouldering responsibility 
for their maintenance the year round, at some 
employment, profitable or unprofitable, and if 
necessary at a bare subsistence wage. At the 
same time they exhort the laborers to humble 
contentment with whatever lot fate or God Al- 
mighty has appointed them. This notion is closely 



26 SCOPE AND FUNCTION OF ECONOMICS. 

akin to the wages fund fallacy; and while this 
notion is preferable to the utter indifference of 
the thoroughgoing lassez faire economist, it is 
distinctly at variance with the democratic spirit 
of today, a spirit which even in the days of Rus- 
kin and Carlyle was strongly in evidence, and 
which is gaining force every passing year; a 
spirit whose very essence is the feeling that one 
man is as good as the other; and that he has an 
unquestionable right to an equal standing before 
the law and before the ruler of destiny. Imbued 
with this spirit, no man worthy the name is will- 
ing to stand before another man as a mendicant 
and an object of charity, as a beggar for leave 
to work; the more so, as the impression is daily 
gaining ground that this other man is a despoiler 
and a parasite upon the one who is expected hum- 
bly to ask for employment. 

The thought that the laboring poor are of 
necessity and in the nature of things beholden 
to the well-to-do for work is part and parcel 
of the wages fund theory; a theory, that it is 
the possessing class, the landowners and the pos- 
sessors of much money, that it is these who 
furnish employment for the masses, as well as 
the necessary capital for such employment, the 
wages fund. I have referred to this as a fallacy, 
and I shall briefly point out that while there is 
some truth in this theory it is but a half truth; 
and, as such, it is even more harmful than a com- 
plete fallacy, inasmuch as men have accepted it 
as wholly true, and have based economic beliefs 
on this foundation. It is true that permission 
to till the soil for the raising of food, granted 



SCOPE AND FUNCTION OF ECONOMICS. 27 

upon the condition of a tribute called rent, then 
as in our day, depends upon the readiness and 
consent of the landowner. And considering that 
such owner often furnished seed, implements, live 
stock, and housing, and in many cases directed 
and supervised the labor of tillage, it was quite 
natural to look upon the landlord as the one who 
provides employment for the farm laborer. But 
when in the course of time "the thoughts of men 
are widened" and the propriety of private owner- 
ship of land is called in question; when it is 
asked in all seriousness: does private ownership 
of land any longer conduce to human welfare; 
also, how and in what manner did these men or 
their ancestors secure title to these lands; and 
are not these lands in all reason the common 
heritage of the race, then the landlord will be 
seen as a supernumerary, and no one will credit 
him with furnishing employment for labor. He 
will disappear from the stage of life and from 
the pages of economic textbooks, and also from 
the reasonings of economists as a factor in value 
determinations. 

In similar manner it can be shown that the 
commonly accepted maxims of economists, that 
capital is the result of the capitalist's abstinence ; 
and that capitalists provide a wages fund and 
thus furnish labor with employment, and that 
this employment is limited by the amount of 
available capital ; these, it can be shown, are half 
truths, containing much undeniable truth, but 
also a great deal of error. And these maxims 
become more pronouncedly false, as men develop 



28 SCOPE AND FUNCTION OF ECONOMICS. 

into greater fitness for a higher and more orderly 
state of society. 

It is true that some capital is the result of 
saving and abstinence on the part of the owner. 
But this is by no means true of the accumula- 
tions from profitable deals and speculative ma- 
nipulations, of excessively large fees or salaries 
and the profits from stock or rental property, 
from which the holder may "save'* capital with- 
out abstinence on his part in any true sense of 
the word. In so far as any abstinence is involved 
in such cases, that abstinence is practiced by 
proxies, by those who pay the large fees, salaries, 
or profits, or upon whose labor such profits are 
made. It is true that, downright robbery ex- 
cluded, no nation or community can accumulate 
capital except by saving, by abstaining from con- 
suming all the wealth it produces. Stating this 
in other words, no nation can accumulate capital 
unless a considerable part of its active labor is 
devoted to the production of tools, machinery, 
appliances, transportation facilities, etc., so- 
called capital goods, as distinguished from con- 
sumption goods ; the latter being such as are im- 
mediately or shortly consumed, mainly food and 
clothing, daily or yearly necessaries and luxuries. 
All this is true, but it is absurd and utterly false 
therefore to conclude that all existing capital is 
the result of saving and abstinence on the part 
of the present owners, and that no capital could 
be accumulated and become available, except by 
promising the rewards of interest, rent and profit, 
as an inducement for private individuals to ab- 
stain and to save. It shall not be denied that 



SCOPE AND FUNCTION OF ECONOMICS. 29 

this has been an effective motive in the past, as 
well as being so today, for abstaining, and thus 
making available necessary funds of capital. This 
is the economics of the past and of the present. 
But the economics of the future discerns the 
possibility of providing necessary capital funds 
by community abstinence and saving, instead of 
by individual savers ; whence also the fruits of 
that saving will redound to the community in- 
stead of to private individuals, whatever form 
that fruitage in the development of things may 

take. 

As a matter of fact, community abstinence and 
saving has already for a long time been operative 
in the form of certain taxes and assessments 
for public improvements ; such as sewers, streets, 
parks, bridges, harbors, and for schools. Inter- 
est bearing bonds are often issued, more quickly 
to raise the funds for such purposes. These 
bonds, upon which the holders have advanced 
money to the community, that is, capital, sub- 
sistence fund, or wages fund if you wish to call 
it that, will have to be redeemed; that is, the 
loan has to be repaid at maturity, and interest 
payments have to be made at stated intervals; 
and the money for such interest as well as for 
final repayment of the loan is raised by taxation 
of the community; this implies abstinence, saving, 
renunciation, on the part of the taxpayer. It is 
no wild dream to assume that in the near future 
communities will endeavor to raise this money, 
this capital, by the required taxation in the first 
place; instead of borrowing from bondholders, 
then pay interest for a term of years, and finally 



30 SCOPE AND FUNCTION OF ECONOMICS. 

repay the capital, for which it has to tax itself 
just the same. And going a step further, we may 
consider the time not far distant when systems 
of taxation may be devised that will enable com- 
munities to tax themselves, or rather their pro- 
ductive labor, so as to provide the necessary capi- 
tal for the maintenance and improvement of 
means of production and distribution, without the 
interposition of private capitalists requiring the 
payment of interest. In that day the assertion 
that all capital is the result of the individual 
owner's abstinence and saving, will no longer 
pass as an axiomatic truth of economics, but 
will take its place as ancient history. And even 
more emphatically will this be the case with the 
whole wages fund doctrine, with the statement 
that it is the capitalist who furnishes employ- 
ment for labor, and that this employment is 
limited by the amount of available capital. 

It is true, that up to the present, large enter- 
prises could not have been undertaken but for the 
subsistence fund, or wages fund, furnished by 
so-called capitalists, unless the state or city as 
such would undertake these enterprises ; and for 
that the state has not as yet developed sufficient 
fitness, as a general thing. 

In the gathering, or raising of, this capital, 
and thus making it available, the private capitalist 
has performed a real and an important sociolo'^- 
ical function, though he may not in any appre- 
ciable measure have practiced abstinence himself, 
but rather done his saving by proxy ; imposed the 
abstinence, as it were, upon the lower orders. 
Yet, he was instrumental in having the saving 



SCOPE AND FUNCTION OF ECONOMICS. 31 

done, and so fulfilled a function in society, and 
in a sense did, by virtue of this assembled capi- 
tal, furnish a certain amount of employment for 
labor. But it is utterly false therefore to con- 
clude that the capitalist in this way furnishes all 
employment, and pays all the wages of labor, as 
conventional economists say, and perhaps be- 
lieve, or at least teach. 

It is the ultimate consumer who furnishes all 
employment and who, generally speaking, pays 
all wages; he it is who, in the final analysis, 
pays even the wages that were first advanced from 
a wages fund used in establishing new enterprises, 
as well as the wages of much of the unproduc- 
tive labor performed by or for the so-called eco- 
nomic parasites. When once a manufacturing 
establishment, a railroad, street car enterprise, or 
what not, has become a going concern, its income 
is derived from the traveler, shipper, or other 
ultimate consumer, and flows in a constant stream 
into the coffers of such a concern ; and from this 
all wages, salaries, and expenses are paid, as 
well as repayment made of much of the original 
investment, if not all. Precisely so, and much 
more fully so, is this the case with mere buying 
and selling enterprises. It is the ultimate con- 
sumer who sustains them all. And who is the 
ultimate consumer? Why, every man, woman, 
and child in this world is of necessity a consumer ; 
a consumer all his days, and in a way a consumer 
even before birth and also after death, in that 
he occasions employment for coffin maker and 
for grave digger. In a small measure is it true 
that capital, the accumulated savings, furnishes 



32 SCOPE AND FUNCTION OF ECONOMICS. 

employment, and in a large measure is it false; 
and upon this false assumption, serving as a 
fundamental axiom, an essentially false political 
economy has been built up. 

But some economists may say: the mere fact 
that an individual desires to consume things does 
not make him a consumer in the economic meaning 
of that word ; he must be an effective consumer, a 
purchaser ; if he has no purchasing power, he has 
no standing in economic reasoning. Precisely 
so, and why may he be without purchasing 
power? Just because the false economic condi- 
tions that rule in the world today have stripped 
him of a large part of that purchasing power, 
by often denying him employment, and by deny- 
ing him just remuneration when he is employed. 
And this denial of employment is brought about 
by permitting land and other natural resources 
to be monopolized and controlled as private prop- 
erty, in consequence of which employment itself 
has largely become a monopoly, controlled by 
the possessing classes; and employment is man- 
aged as the interests of these owners and .con- 
trollers dictate, regardless of how illy the 
disinherited masses may fare. And this is the 
great sin of orthodox political economy; instead 
of casting about for a remedy for these evils, it 
is content to justify them in the name of science, 
as being natural and unavoidable. 

But it is not intended in this brief treatise to 
examine at length the various fundamental errors, 
which in the present writer^s opinion largely in- 
validate the whole so-called science of economics, 
as conventionally taught in the schools; such a 



SCOPE AND FUNCTION OF ECONOMICS. 33 

work lies beyond his ambition. My purpose is 
to examine the current value theories, to demon- 
strate their inadequacy and their failure to serve 
as a basis for economic thought ; and then to pre- 
sent for the consideration of competent critics, 
what I conceive to be a true and workable theory 
of value. A theory, which, if accepted, will not 
only revolutionize economic thought, but will also 
settle most of the difficulties and controversial 
differences that now beset the science ; and which 
at the same time offers a solution for many of 
the political and economic problems that vex our 
age, that give occasion for industrial strife in 
every civilized country, and that even cause na- 
tions to engagfe in war. 

The all-pervading question of mine and thine 
reduces in economics to a question of value, a 
question of exchange ratio — at what ratio shall 
my labor exchange for thine? Until this ques- 
tion is answered satisfactorily, fairly, ;and as 
justly as limited human wisdom may be able 
to answer, until then, there is no science of po- 
litical economy worthy the name of science. To 
answer that question is the task the writer of 
this treatise has attempted. And to pave the 
way for such answer, it has been necessary brief- 
ly to call attention, not only to the dissensions 
in the ranks of economists, but also to what I 
consider fundamental errors. As stated above, 
it lies beyond the scope of this little book to 
review the entire field of economics; and there 
are certain departments that I shall not discuss at 
all. A slight reference to some of these may be 
made, merely in an incidental way; they are not 



34 SCOPE AND FUNCTION OF ECONOMICS. 

essential to the subject of the present treatise. 
Under this head comes the subject of money as 
a medium of exchange. The subject of this 
treatise is the origin, nature, and essence of 
value, and its quantitative determination. The 
media of exchange, which convenience may dic- 
tate, as well as the conventional standards, money 
standards, in which everyday life expresses value, 
are matters for later consideration; and with 
these I do not propose to deal, nor with the ques- 
tion of foreign trade and liquidation. These are 
subsequent details; the primary questions are: 
what is value, how does it arise, what creates it, 
causes it, produces it, constitutes it, and how is 
it determined quantitatively. This will be dis- 
cussed at length in Part II. 

It remains here but to remark that the pro- 
posed value theory is independent of socialistic 
forms of society; if true, it is true under private 
ownership of capital as under collective owner- 
ship; true along with the existence of private 
property in land or without; true irrespective of 
interest, and rent. The writer shall make no 
attempt to deny his socialistic predilection, nor 
deny that socialist sentiment should incline a 
reader to accept the author's value theory as a 
true one and a salutary one, while individualistic 
conservatism will of necessity strongly prejudice 
against it. But whether the world is ripe for a 
greater measure of collectivism, or whether it 
shall be found that the human race is not ready 
for such, and must yet a while endure under 
the regime of competitive individualism, this 
theory of value should in either case appeal to 



SCOPE AND FUNCTION OF ECONOMICS. 35 

the growing sense of democracy manifest in all 
the world ; to the sense of fairness and the desire 
for truth and for social justice, which is the hope 
and encouragement of all well-meaning and clear- 
thinking men. 

Considering that all the foregoing is introduc- 
tory to a promised theory of value, and that a 
large part of the next chapter will be of an 
introductory nature, the reader may become 
wearied of all this introductory matter and impa- 
tiently ask for a statement of this theory, I 
think it advisable therefore to close this chap- 
ter with the following proposition, which con- 
cretely embodies my value theory: 

Equal pay, hour for hour, for all kinds of use- 
ful work of standard efficiency, male or female. 

This is a demand which I formulated a few 
years ago, and which I have never seen as part 
of any radical platform. Its absence from these 
is an indication that the makers of these plat- 
forms had no adequate value concepts to give 
expression to. They have much to say about giv- 
ing the laborer a just reward, some say the full 
value of his toil, or a full return for the value 
he creates; but they give no hint as to how that 
value is to be determined, otherwise than by the 
haphazard and unjust methods of supply and 
demand that are accepted or assumed in the eco- 
nomics of today ; methods that can neither estab- 
lish industrial justice, nor bring industrial peace. 
To supply this need, to give such answer, is the 
purpose of this little book. 



PART II. 

VALUE. 

Chapter II. 

General Value Notions. Anderson and 
Davenport on Value. 

What is value? How is value determined? 
These are questions which for many years have 
occupied my attention, not only occupied, but 
greatly puzzled me; since no thinking man or 
woman can fail to see that the value-estimates 
which rule in human affairs are, generally speak- 
ing, strangely absurd, as well as grossly unjust; 
especially in regard to valuation of different 
kinds of human labor, and compensation allowed 
for the same. That the severest and most bur- 
densome toil has had put upon it the lowest value 
estimate, and consequently has received the 
meagrest compensation, while merely orna- 
mental, or doubtful, and even harmful activities, 
have been amply rewarded, this is a commonplace, 
repeated, over and over again, both in economic 
and in general literature, not to speak of reform 
literature. Realizing the unfairness and injustice 
of the value estimates that the world in general 
has been in the habit of accepting, and has con- 
sented to live under, I gave that subject much 
thought, and I arrived at several conclusions. 
First, that the value estimate put upon things 
is, in the final analysis, a value estimate put upon 

36 



ANDERSON AND DAVENPORT ON VALUE. Z7 

labor. For inasmuch as things, ^commodities, 
are labor products, it follows that the value esti- 
mate put upon various commodities really is a 
value estimate put upon various kinds of labor 
that produced these commodities. Secondly, I 
arrived at the conclusion that justice and fairness 
demands that that labor which is the most severe 
and burdensome, which, in the language of mod- 
ern economists, involves the greatest amount of 
labor pain, should be the more highly compen- 
sated, if any difference of compensation is to be 
allowed. 

Why is it, for instance, that upon a bushel of 
wheat, society, or the "world," puts a value esti- 
mate of 50 cents, 75 cents, or one dollar perhaps, 
(I am speaking of prewar times) an estimate 
which, according to statements made at recent 
farmers' conventions, puts upon the farmer's 
work a labor value of about one dollar a day. 
And this is a labor of the utmost importance, a 
labor absolutely essential to human existence ; but 
the work of some windy go-between, whose activ- 
ity results mainly in diverting business from Mr. 
A to Mr. B, is four and five times as highly com- 
pensated. The coal miner in this country has until 
recently been one of the poorest paid laborers, 
notwithstanding the fact that the product of his 
labor constitutes one of the prime necessaries of 
life, and that his work is perhaps the most bur- 
densome known to man and the most dangerous 
to life; while many other occupations, much 
lighter and less disagreeable, have been more 
highly compensated, partly because of custorn, 
and partly because backed by a powerful organi- 



38 GENERAL VALUE NOTIONS. 

zation. Why can this be? What principle or 
power operates to estabHsh such unfair valua- 
tions? I concluded there was no principle in- 
volved at all; at best only a convention or a 
traditional custom, masquerading as principle, or 
as an economic law, designated by ordinary po- 
litical economy as the law of supply and demand. 
I further arrived at the conclusion that industrial 
disputes, often resulting in riot and bloodshed, 
disputes that nominally center about wages and 
length of workday, really are disputes about the 
value estimate to be put upon an hour's labor in 
the trade or occupation involved in such strikes. 
Whence it follows : that if a value estimate could 
be established that would appeal to the sense of 
justice and fairness of all men, one that would 
satisfy and be generally accepted by the civilized 
world, then there would be an end to industrial 
strife within the various countries; and the for- 
eign commercial policies of these countries would 
be so influenced as to remove largely, if not whol- 
ly, the incentive to war between nations. Further- 
more, I became convinced that a rational theory 
of value, based on sane and true value estimates 
of all labor and labor-products, and a political 
economy built upon such a theory of value, and 
expressed in the national life, in the economic 
institutions, and in the industrial activities of a 
country, would effectually prevent the industrial 
deadlocks, known as panics or business depres- 
sions, which periodically afflict present-day society 
with their attendant aggravation of unemploy- 
ment and consequent misery. For I contend, 
that an industrial policy and practice founded 



ANDERSON AND DAVENPORT ON VALUE. 39 

on a true evaluation of all the products of labor 
and of the labor itself would establish a commen- 
surate flow of purchasing power back to the origi- 
nal producers, so as to make relative overproduc- 
tion and consequent stagnation and unemploy- 
ment impossible. Believing this, I felt that such 
a value theory, properly formulated and eluci- 
dated, constitutes a message to the world, which 
duty bids the possessor thereof to deliver, though 
doing so may involve personal sacrifice and loss. 
That feeling of duty has for the last few years 
pressed upon me with increasing force. Ordi- 
nary sense and prudence, however, bade me as- 
certain what other men have thought and said 
on this subject of value, and especially to ascer- 
tain what accredited economists had to say con- 
cerning value. I was not aware of the vagueness 
of current value theories, nor of the controversies 
and conflicting opinions concerning value, that 
obtain among economists. It is true, I had in 
my school days taken a light course in political 
economy, the textbook being Walker's Briefer 
Course. I had also many years ago read another 
book on political economy, but neither of these 
books had at the time made any distinct impres- 
sion on my mind in regard to value theories. 
I therefore had recourse to the public library, 
and the first volume I took up, attracted by its 
title, was "Social Value," a Hart, Schaffner & 
Marx prize essay by B. M. Anderson, Ph. D., 
Instructor in Political Economy at Columbia Uni- 
versity I was somewhat astonished to read m 
the author's prefacing note the following state- 
ment • "The problem of value forced itself upon 



40 GENERAL VALUE NOTIONS. 

me in the course of my teaching. My students 
seemed to understand the treatment of value in 
the textbooks used quite clearly, but I could never 
convince myself that I understood it, and the con- 
viction grew upon me that the value problem 
really remained unsolved. Hence this book." 

Professor Anderson's book is of rather recent 
date. May, 1911. It covers nearly two hundred 
pages, and evidences on the part of the author 
wide economic reading and study. He reviews 
the whole field of recent economic writing, in a 
persistent search for a true and consistent theory 
of value ; and he is much impressed by and gives 
credit to what he calls the Austrian school of 
economists and their subjective value imputa- 
tions, including the marginal utility and value 
idea. He is likewise appreciative of more re- 
cent interpreters of these ideas and their investi- 
gations along this line of inquiry. But he re- 
jects the results of their efforts as unsatisfac- 
tory and inconclusive, and in the end, as it seems 
to me, he offers nothing substantial and tangible 
himself. So vague and abstruse is the presenta- 
tion of his own value theory that I had much 
difficulty in finding it, but finally concluded that 
Professor Anderson's value theory is wrapped 
up in a page and a half of technical disquisition 
(pp. 185-86) to this eft'ect, that the value theory 
must be derived from, and presupposes, a price 
theory. This is stated more briefly on p. 192: 
"The theory of value, as I conceive it, is, then, 
not a substitute for detailed price-analysis, but 
rather a presupposition of it. The theory of value 
is to interpret, validate, and guide the theory 



ANDERSON AND DAVENPORT ON VALUE. 41 

of prices." Here it seems he makes the value- 
theory a presupposition, while on page 184 price- 
concept is the presupposition: "The conception 
of abstract units of value therefore is an abstrac- 
tion from the price conception and presupposes it/' 

Professor Anderson does a great deal of theo- 
rizing on the subject of value, but I cannot see 
that he submits anything definite and clean cut 
that I could call a theory of value. Whatever 
he may have had in mind, I confess I got from 
his book no light on the value problem. All it 
did for me was to certify to the great diversity 
of opinion, the vast controversial literature, and 
the general vagueness and confusion that obtain 
in the realm of economics, especially in regard 
to the value problem. This, together with the 
confession that the value problem to date re- 
mains unsolved, is what I got from Professor 
Anderson's book. 

Four economists are reviewed at considerable 
length in Professor Anderson's book: Clark, 
Seligman, Wieser, and Davenport. The latter is 
the author of several books on economics, one 
of which, "Value and Distribution," a volume 
of 575 pages, is a critical study dealing with 
the value problem, and this book is also of com- 
paratively recent date, 1908. A brief note of 
dedication to J. L. Laughlin, certifies once more 
to the controversies and to the divergence of 
opinions held by economists in regard to the prob- 
lem of value, by the following statement: "In a 
field so controversial, as this of value-doctrine, 
identity of interest is no pledge of agreement; 
much therefore in the following pages must fail 



42 GENERAL VALUE NOTIONS. 

to command your acquiescence/* Professor 
Davenport states in the preface that he has 
emphasized opportunity cost as an element of 
value, and he says on page vii : ^'Political econ- 
omy began its value theories with cost of pro- 
duction from the entrepreneur point of view, but 
wandered far afield in search of labor determi- 
nants of value, and labor standards of value meas- 
urement." And on pages viii and ix he says: 
*'Little can be offered that is new on utility and 
its modern refinements ; but the relativity of util- 
ity on the demand side, and cost on the supply 
side of the market equation, has seemed in spe- 
cial need of emphasis." . . . "The necessary 
thing has in the main seemed to be to rid the 
science of doctrines that do not belong to it, as 
labor time, labor pain, utility and marginal util- 
ity determinants of, or measures of, value." 

Well, if this author has nothing new to offer, 
and if furthermore he proposes to discard labor 
time, labor pain, and utility as value determinants, 
then there is nothing in his 575 pages that can 
be of any constructive help to the present writer ; 
for utility, labor pain, and labor time are the 
very things that I contend are the real factors 
which determine and constitute economic value, 
exchange value as well as use value. 

However, in another way Professor Daven- 
port's book proved interesting as well as inform- 
ing to me, inasmuch as it bears witness to the 
controversial condition of economic science, and 
to the fact of an unsolved value problem. Very 
interesting to me is his critical examination of 
the value theories of many prominent economists, 



ANDERSON AND DAVENPORT ON VALUE. 43 

finding them inadequate and unsatisfactory, and 
invalidated by circle-reasoning. He begins his 
discussion with these statements: "The scien- 
tific development of economic theory began with 
the attempt to solve the value problem. Almost 
all the early doctrine was cost doctrine in some 
of its varying aspects. The earlier writers inter- 
preted cost in terms of labor, but in the detailed 
working out of the value problem and its further 
development, the notion of cost came to be pre- 
sented in all its diflFerent and conflicting senses." 
Then he cites Adam Smith as stating that the 
labor of a nation is the fund that originally sup- 
plies it with the necessaries and conveniences of 
life. This Davenport terms the labor purchase 
doctrine of cost (p. 8), and elucidates by further 
quotation from Chap. V, Wealth of Nations: 
Labor was the first price, the original purchase 
money paid for all things ; by labor all the wealth 
of the world was originally purchased, and the 
value thereof is equal to the quantity of labor it 
again can purchase or command. To this Daven- 
port objects that it holds only under a particular 
situation; and he argues at length that environ- 
mental opportunity enters as a factor into the 
productiveness of labor, and therefore becomes a 
factor in the value of the product. Quoting 
further from the same chapter of Adam Smith's 
Wealth of Nations to the effect that equal volumes 
of labor must be of equal value to the laborer, 
because he must lay down the same portion of his 
ease, his liberty and his happiness, Davenport 
sees in this a distinct enunciation of labor pain 
cost as the determinant of the real value of 



44 GENERAL VALUE NOTIONS. 

labor. And again quoting Smith : "Labor there- 
fore is the real measure of the exchange value of 
all commodities. The real price of everything, 
what everything really costs the man who wants 
to acquire it is the toil and trouble of acquiring 
it; what everything really is worth to the man 
who has acquired it is the toil and trouble it can 
save himself and which he can impose upon 
others.'' And on this Davenport comments, page 
13: ''This means that the real price or real 
value is always the labor of attainment; but 
whether this labor is conceived as in itself a 
value or a burden is not so clear.'' 

Precisely here economists are groping in the 
dark, when they assume that labor cannot be 
both burden and value or value essence, value 
potential, but that these two attributes mutually 
exclude each other. That labor is a burden is 
quite self-evident and calls for no argument; 
that it also is the producer of value, the "value 
producing burden," is equally self-evident, and 
is universally admitted, and therefore a "value" 
may be imputed to labor, a value estimate put 
upon it. Both these attributes, value and burden- 
someness, belong to labor, just as clearly as the 
two attributes of hardness and weight may belong 
to some one substance; and this should present 
no difficulty to human understanding. The dif- 
ficulty of understanding this in the past, I think, 
roots in man's historical environment; he has in 
all past time seen how the possession of values 
has freed the possessor thereof from the burden 
of labor, hence value and labor burden became 
antithetical conceptions of the general mind. It 



ANDERSON AND DAVENPORT ON VALUE. 45 

was seen that when a man held possession of 
much value, of much exchange value, of money 
if you please, or other exchangeable commodities, 
he could thereby command the labor of those who 
had little or none, and thus shift the labor burden 
of Hfe upon those others. Hence in the minds 
of men value and labor burden became opposites ; 
and to this erroneous conception is largely due the 
confusion in economic thought of the past, as well 
as of our own day, a confusion which will disap- 
pear with the acceptance of a rational theory of 
value. 

I defer a more detailed consideration of labor 
as burden and value to a later page and recur to 
Davenport, who further quotes Adam Smith to 
this effect: that though labor is a real measure 
of exchange value of commodities, it is not labor 
by which the value of commodities is commonly 
estimated. Popular thought does not have re- 
course to a labor measure of value, because peo- 
ple estimate concrete commodities rather than 
abstract labor. And here Davenport remarks, 
page 14: "All of this means that it is possible to 
reduce labor to a homogeneous fund [quantity], 
but of what? Time? Evidently not. Of pain? 
This also will not serve. Of value? But if 
value depends upon and is derived from the prod- 
uct, then it is value that is called upon to explain 
value, a view which would conceive labor as re- 
ceiving rather than determining value." 

And again, on gage 18: "It may not be clear 
why the common denominator for value based 
on labor was considered so important, but the 
labor measure of value seems to have been the 



46 GENERAL VALUE NOTIONS. 

only one thought possible at the time. And it 
may be questioned whether later thought, in sub- 
stituting utility for labor cost as a value determi- 
nant, has been able to do more upon the utility 
side than repeat the error on the cost side, 
namely, seeking to compare things which in their 
fundamental nature offer no basis for compari- 
son. With value conceived as a mere ratio of 
exchange, the statement of that ratio can have 
no meaning for the purpose in hand, unless some 
common denominator has been established." 

In passing I want to say that both the labor 
cost doctrine and the utility doctrine of value are 
true, but taking either by itself and excluding 
the other they become misleading half-truths. 
Labor cost and utility must be combined to con- 
stitute value, and the attempt of various schools 
to emphasize one to the exclusion of the other, 
has led to confusion of thought, and to endless 
controversy. I am in nowise puzzled that the 
labor measure of value seemed so important, and 
the real one, to Adam Smith and the early econ- 
omists. Their postulate, that labor is the pro- 
ducer of all wealth and of exchangeable value, 
is a truth so self-evident that it was deemed all- 
sufficient to explain value. Later emphasis was 
placed upon the fact that labor might be mis- 
directed, or wasted, and therefore fruitless as to 
any resultant value; hence the equally essential 
condition of value, utility, was found to be as 
self-evidently necessary to a complete value con- 
cept as labor. This I shall treat of more at 
length further on, where I mean to demonstrate 
that labor is reducible to a universal homoge- 



ANDERSON AND DAVENPORT ON VALUE. 47 

neous essence — labor pain, and to a homogeneous 
quantity — labor time; a homogeneity which, 
though not absolute, is sufficient for all practical 
purposes of human life and association. If this 
can be shown to be true, then it removes Pro- 
fessor Davenport's stumbling block, presented 
in the following statement, page 21 : "Adam 
Smith's reasoning is reducible to a formula in 
porportion — labor : labor : : value : value [labor 
is to labor as value is to value] * which is per- 
fectly correct upon the assumption of perfect 
homogeneity of labor, but this is admitted by 
Smith to be wanting, where he says: 'If one 
species of labor should be more severe than the 
other, then some allowance will naturally be made 
for the greater hardship ; and the produce of one 
hour's labor may exchange for two hours in the 
other/ All of which is correct as a matter of 
everyday fact, but with it the proportion doctrine 
falls, and with it time cost." Let us note in pass- 
ing that higher compensation for severer labor is 
here spoken of as an everyday fact. The reverse 
of this is more generally asserted; of this more 
will be said later on. 

Professor Davenport also speaks of pain cost 
and abstinence cost being both asserted and again 
abandoned by Smith as value determinants ; and 
on page 30 he refers to Ricardo as follows : "Very 
confusing in Ricardo's discussion is the fact that 



* Since the author expects this book to be read by many 
who are not familiar with mathematical formulae, I shall 
try to make clear that this means that for instance 8 hours 
labor is to 4 hours labor as 2 quantities of value are to 1 
quantity of value; that is, both these ratios, 8 to 4 and 2 to 1, 
are alike, both being as 2 to 1. 



48 GENERAL VALUE NOTIONS. 

he uses two meanings for the term value, one 
meaning real value in the sense of concreted 
labor — concreted pain cost, the other meaning 
power in exchange. And that Ricardo also has 
two meanings for Value of labor' — one meaning 
mere market value of labor and the other ratio 
of labor to profit. Ricardo never accepts the doc- 
trine that the value of labor depends upon the 
value of the product, but consistently holds the 
contrary, that the value of a commodity depends 
upon the labor put into it, [that is] upon the cost 
of production.'' And on page 34: ''With all the 
Ricardoan group, as with Adam Smith, the de- 
sideratum in the exchange value problem was to 
get a measure. If land, the Physiocrat's basis, 
was discarded what else then could serve but 
labor? Utility could not serve then [at that 
time], whether we shall say that the required basis 
has now been found in the marginal notion or 
not. Ratios would not serve the purpose, ratios 
of what? Determined by what?" 

It might be interesting to quote also Daven- 
port's reference to Mill, Senior, Cairnes, Say, 
Boehm-Bawerk, and Clark, and their proposals, 
in all of which he finds no satisfactory solution of 
the value problem. But I must desist; for this 
is not to be a review of Prof. Davenport's book, 
and the reader may be getting impatient to hear 
what the present writer has to offer as a solution 
of that problem. I thought it necessary to cite 
Anderson and Davenport as evidence of the con- 
troversial state of economic science, and of an un- 
solved value problem, which neither of these men 
make claim of having solved. In support of which 



ANDERSON AND DAVENPORT ON VAEUE. 49 

I quote a few additional passages, condensed from 
''Value and Distribution" : 

"No writer of the cost school can fairly be 
charged with overlooking the fact of utility as a 
fundamental condition to the existence of value. 
Utility and the market demand are taken for 
granted, but the fixation of value, always inside 
the limits of utility, must be found on the cost 
side. True, there are goods of a distinctly scar- 
city sort, but these were left out of the reckoning 
as exceptional in character and unimportant in 
quantity; the investigation confined itself to re- 
producible goods" (p. 44). 

This is a significant statement with which I 
have no quarrel. It is good as far as it goes, and 
I may have occasion to refer to it later. 

On page 334 I find another significant state- 
ment: "It is also true that competition is placing 
new values on cost goods, and brings about a new 
proportioning of values with costs or costs with 
values, and in turn upon these new costs, new 
computations and producings, and so on indefi- 
nitely in a circle, the result of each situation be- 
coming in turn cause for the next term in the 
series. The ultimate causation must then be 
sought elsewhere; in the sense of finality neither 
cost nor value is cause, and any attempt to fix 
upon either as ultimate, or even as logically prior, 
must inevitably lead to circuity of reasoning or 
to question begging." Also page 346: "The 
ultimate test must come with the newer treatment 
of costs ; in the conviction of the present writer 
[Davenport] the Austrian doctrine [marginal 
utility] does not make a convincing showing. 



so GENERAL VALUE NOTIONS. 

Value as cost may explain value as product, but 
how are we to explain the first value ?*' 

Here is a plain confession that the value prob- 
lem so far has been an unsolvable riddle to econ- 
omists, and Davenport hopes for a ''newer 
treatment of costs'' to help solve this riddle. 
Economists seem to be as lost and as helpless 
without a value measure as were merchants in 
handling goods bought and sold by length meas- 
ure before modern governments established legal 
standards of length, which gave them yardsticks 
of uniform and definite length. 

A quotation from Professor Davenport's con- 
cluding summary is in point ; page 570 : "Neither 
in utility on the demand side, nor in pain cost on 
the supply side can there be found a common 
denominator, or standard, or determinant of 
market value, or of price as its money expression. 
The only common denominator of value is found 
in selection of a conventional standard for that 
purpose, a price commodity." 

This clearly is equivalent to giving up as a bad 
job the attempt to find that much desired com- 
mon denominator of value, and to formulate a 
really satisfactory theory of value. The next 
chapter presents the present writer's solution of 
that problem. 



** Chapter III. 

Value Based on Labor of Standard 
Efficiency. 

I now proceed to lay before the reader my own 
value theory, and I do so by repeating the opening 
question: What is value? How is it determ- 
ined ? Why is one thing estimated at a very low 
value, though useful, or even though indispensa- 
ble, while another thing, unnecessary, and per- 
haps not even useful, is estimated as of high val- 
ue ? Why does the man who performs hard and 
very useful labor generally receive the lowest 
wages, while another may be paid twice or tenfold 
as highly, whose work, when critically considered, 
may be found of doubtful utility? Such things 
are everyday facts. Why are they so ? Upon 
what grounds are such facts justified? Or are 
they not justified at all, at least not in reason and 
conscience? Are they permitted to be, merely 
because of unconscious fraud and imposition on 
the part of those who thereby gain advantage, 
and permitted also by the equally unconscious 
ignorance of the victims? 

Verily so. I hold that all oppressive injustice, 
economic, political, or social, which is upheld by 
custom and usage, is permitted to continue be- 
cause of the general ignorance, the ignorance of 
both appressor and oppressed, the ignorance of 
the man who derives a seeming advantage, as 
well as the ignorance of those who suffer because 
of the injustice. And so it is with the injustice 

SI 



52 VAI,UE BASED ON LABOR 

that flows from the world's false value estimates. 
Right here it may be asked: who is to blame for 
this ignorance, who is responsible for the false 
value estimates that possess the minds of men 
even to this day ? Who else but the moral philos- 
ophers and the economists, those whose particular 
business it should be to instruct and enlighten 
the world upon the subject of value and sane 
value estimates; those who should correct the 
world's false value notions, rather than tabulate 
and describe the false and foolish value concepts 
that have been held from time to time. Those 
are to blame, if on the whole we are justified in 
blaming anybody, or any class of men, for false 
notions which are practically universal, and for 
which, in a sense, the race at large must shoulder 
the responsibility and bear the consequences. 
However, from time to time there appears a 
pioneer to open up new paths of thought and to 
bring new light; and it is now time for some- 
one to formulate a value theory that will be to 
economics what the law of gravitation is to 
physics; a basic principle of economics, which 
will relieve the chaos and confusion, and fur- 
nish a foundation upon which a real science of 
economics may be established. And what is that 
value theory, what is its formula? 

I closed the first chapter with a platform propo- 
sition which was said to embody my value theory 
in a concrete statement. That statement reads: 

Equal compensation, hour for hour, for all 
kinds of useful work of standard efficiency, male 
or female. 



OF STANDARD EFFICIENCY. 5^ 

Let us analyze this statement and examine its 
parts ; and iet us see how they connect with a 
concept of value : 

Equal compensation, remuneration, wages, 
pay, price of labor, hence — value estimate of 
labor; which is to be equal, hour for hour. 

We have then here a value estimate of labor 
in connection with the time element; a labor time 
theory of value. Labor is to be rewarded accord- 
ingly as it produces value; and that reward is 
to be equal for equal time upon the presumption 
that this labor of standard efficiency produces 
equal values hour for hour. That is to say: one 
hour's standard work in one occupation or field 
of labor produces the same value that an hour's 
standard work in another occupation produces. 
This presumption, of course, has to be proven 
true, at least practically true, though not abso- 
lutely true, yet true in sufficient measure to an- 
swer all practical purposes of associative human 
life. To prove this is the present writer's task; 
upon this depends his entire value theory; and 
if he cannot convincingly show the reasonable- 
ness of this proposition, so as to make the same 
acceptable to fairminded intelligence, then his 
value theory falls to the ground. 

To assume that labor in equal time produces 
equal value, simply labor, without any qualifying 
specification, that is so preposterous, so contrary 
to reason and sense, that no one assents to such 
a statement; and practically all economists have 
abandoned a bare labor time theory of value, how- 
ever sorely they needed a labor cost measure of 
value. Wherefore they endeavored to base their 



54 VALUE BASED ON LABOR 

value theories on utility, and failing there, sought 
refuge in an alleged law of supply and demand. 
But notice that I have not said labor, or v^ork, 
without adding essential qualifications. In the 
first place my formula specifies '^useful work" — 
equal compensation, hour for hour, for all kinds 
of useful work. This brings the element of util- 
ity into the "value'* based upon this work. 

Next I specified "work of standard efficiency." 
This eliminates the objection which otherwise 
would hold, that the lazy or inefficient were to be 
rewarded equally with the industrious and the 
efficient, on the ridiculous assumption that the 
former produce as much value or utility hour for 
hour as the latter. This matter of standard 
efficiency will be explained more fully later on. 

The third qualification, or rather an added 
amplification, is in the words "male or female" 
— "equal compensation, or equal value estimate, 
hour for hour, for all kinds of useful work of 
standard efficiency, male or female." The addi- 
tion to the formula of these three words implies 
a solution of the vexing question of woman's 
economic dependence upon the male half of the 
race, as it would give her compensation and con- 
sideration equal with man, whatever her line of 
activity, though she be homemaker and house- 
keeper; and it would secure for her that eco- 
nomic independence, without which, equality is 
but a word without meaning, sound without 
sense. I shall not in this treatise touch further 
upon the equal rights of the sexes ; but those who 
are interested in this matter would do well to 



OF STANDARD EFFICIENCY. 55 

examine the promise for their cause that lies hid- 
den in my theory of value. 

The above gives a somewhat dim outline of 
my value theory, and I shall now try to make it 
clearer by means of the customary definitions of 
wealth, value, utility, and labor. 

I find no fault with the customary definitions 
of wealth, as any material object that directly or 
indirectly satisfies human wants, need or desire. 
Also: wealth is anything possessing value, the 
product of labor, capable of being appropriated, 
and limited in quantity. Wealth consists of 
things possessing the quality of value. And 
value is generally defined as the particular qual- 
ity of any object or substance which renders it 
capable of satisfying human desire. 

Other definitions of wealth and of value have 
been offered, some very odd ones, peculiar, and 
I should say quite phantastic ; but generally, defi- 
nitions of wealth and of value are as given above, 
closely associating wealth and value ; and accord- 
ing to these, wealth, the material object, must 
possess utility. Utility is but another name for 
usefulness. A thing to be wealth must then be 
useful; useful for what, to what end? It must 
be useful to satisfy human wants or desires. * 
But this is also the characteristic of value as de- 
fined above; and thus we have utility or useful- 
ness and value closely akin, expressing almost 
the same meaning. There is this difference, 
value comprises usefulness and adds the idea 



* It is to be understood that these wants and desires should 
be "legitimate;" that is to say, they must be such that their 
satisfaction tends to preserve or enlarge human life. 



56 VAIvUE BASED ON I,ABOR 

of quantity, of something measured or measur- 
able. Economists have distinguished value as 
value of use, or use value, and as exchange value. 
Now, value is the product of labor, and in order 
to be value it must imply usefulness, it must 
satisfy human desire; it, or rather the material 
object in which the value is embodied, must be 
deemed desirable by him that made it, or it must 
be deemed desirable by other men to inducejhem 
to give for it something else in exchange. And 
here the difficulty enters as the problem of ex- 
change value ; it assumes the form of a question : 
How much of this thing, the product of A's 
labor, shall he give for some other thing, the 
product of B's or X's labor? How shall this 
exchange value be measured, or determined, as 
to quantity? This is the question which has 
stumped all known economists, and which con- 
fessedly as yet remains an unsolved problem. 

Adam Smith, Mill, Carey, and many others, 
uphold in the main the labor cost doctrine of 
value, while Jevons and the Austrians emphasize 
the utility doctrine of value. As stated before, I 
consider either one of these doctrines taken by 
itself as explaining value to be a half truth ; both 
in cortij unction are required. Utility explains 
value as a quality, and labor cost explains it 
from the quantity side; labor cost gives the 
measure, the amount of value in a product. It 
seems strange that economists have been so per- 
sistent in their endeavor to base their value con- 
cept on one single element, either labor cost or 
utility, though nearly all realized the inadequacy 
of either of these elements for explaining value 



OF STANDARD EFFICIENCY. 57 

without recourse to the other also. That labor 
is the fundamental source of value, and that 
value is proportionate to the labor involved in 
producing anything — little labor producing little 
value, more labor producing more value, this 
seems so self-evident as to suggest itself at once 
as an irrefutable truism. And on the other hand 
it is just as self-evident that there can be no value 
unless there is utility; that labor which does not 
produce utility, somehow, directly or indirectly, 
is wasted, is barren of result as far as any eco- 
nomic value is concerned. Both of these ele- 
ments, labor cost, and utility, are essential to con- 
stitute value; labor, the producing agent, and 
utility, the indispensable condition of desirability, 
are as necessary to constitute value, as two fac- 
tors are necessary for the process of multiplica- 
tion, length and width for rectangular surface^, 
or two chemical elements for a binary compound. 
But, after all, the chief trouble does not lie in 
any failure to recognize the two-fold composi- 
tion of value, but in the failure of making either 
of these elements serve as a measurer, as a basis 
or factor to determine value quantitatively, to 
determine the amount, the "how much," of value 
in any given product, commodity, or service. 
The older economists started with labor time cost 
as a measure of value, but bumped up against 
the fact of non-uniformity of effectiveness in the 
great variety of labor, a non-uniformity all the 
greater as they took into their calculations labor 
from the furthest ends of the earth, in fact any 
labor that by its products enters the world market 
in international trade. Under free competition. 



58 VALUE BASED ON LABOR 

Open world markets, and into the general all- 
around conditions of the 18th and 19th centuries, 
a labor cost determinant of value could not be 
made to fit in; because under those conditions, 
and at that time, it was impossible to reduce 
labor to the required homogeneity which must be 
accorded it, if it is to serve as the common de- 
nominator in which to express the value of all 
labor products. Of this I shall speak more fully 
further on ; suffice it for the moment to say, that 
realizing this impossibility, the labor cost doc- 
trine advocates presented their case as far as 
circumstances permitted, and let it go at that, 
with the result of having their doctrine demol- 
ished by their critics, who for the greater part ad- 
vocated a utility value measure doctrine ; and this 
is as elusive and unsatisfactory as the other, and 
has led to the endless subtleties of marginality. 
Others again fell back on the doctrine of demand 
and supply as the only true and genuitie value 
determinant. But it is now well understood that 
the alleged law of demand and supply has be- 
come a mere fiction of the mind, rather than an 
actually operating law of economics ; that instead 
of regulating values and prices, supply itself is 
more largely regulated by commercially power- 
ful individuals or interests. In consequence of 
this, economics has on hand an unsolved value 
problem, and as a science, political economy is 
today largely discredited. It is also being under- 
stood that an economic regime of supply and 
demand is becoming something obsolete; some- 
thing not in keeping with the spirit of this age; 
something that belongs to a past period in eco- 



OF STANDARD EFFICIENCY. 59 

nomic development, a period of chaos and 
anarchy, which must now give place to economic 
order, regulation, and provision; under which, 
supply of economic essentials will not be left to 
haphazard chance; but will be provided by 
properly instituted authorities, these establishing 
a regulated price of commodities and a supply 
somewhat in excess of the actual need; thus 
making the operation of a law of supply and 
demand a thing of the past, at least as far as the 
prime necessaries of life are concerned. 

I recur now to my aforementioned task of 
proving true the presumption that labor pro- 
duces equal value in equal lengths of time; or, 
re-stating this in the phraseology of modern 
economists, to find a way of reducing the endless 
variety of labor to such a uniformity as a value 
producer that it may serve as a value measurer, 
and as a common denominator in value state- 
ments. This, in one sense, I have already done, 
when I said that to one hour's labor of standard 
efficiency, wrought in one occupation, the same 
value is to be ascribed, and the same potency as 
a value producer, as is ascribed to an hour's labor 
of standard efficiency in any other calling or occu- 
pation. But this needs a great deal of additional 
elucidation. Let us take up first standard effi- 
ciency of labor. What is the meaning of that, 
what does that imply? Who shall set this stand- 
ard, and how ? Let me say in passing, that while 
I have in mind chiefly the economics of the future, 
yet the economics of the present, and the economic 
development, the trend of things economic, is not 
disregarded by me; and these things justify va- 



6o VALUE BASED ON LABOR 

rious assumptions, and various lines of reasoning, 
that could not be justified if economics was taken 
as something fixed and static. Thus, for instance, 
we see a continuous increase of government func- 
tion ; of inspection and supervision. The govern- 
ment mail service, though already an old institu- 
tion, is constantly being enlarged and additions 
are made to the same. Parcel post and postal 
savings banks have been added, while the taking 
over of the telegraph service is in contemplation 
in this country, and already established in many 
other countries. The educational institutions are 
for the greater part publicly owned and controlled, 
and are to receive an enormous extension through 
vocational training features. A vast inspection 
service, national, state, and local, of health, food, 
factories, mines, buildings, boilers, elevators, etc., 
has for some time been in existence and is con- 
tinually being extended. Recently irrigation, 
reclamation, and forest service, have been added. 
The taking over by the state of railroads, and 
by municipalities of public utilities, street car sys- 
tems, lighting and water supply, is contemplated 
and seems to be certain. The extension of gov- 
ernment supervision or control, due to the war, 
of matters formerly left to private control in all 
countries affected by the war, may after its close 
be largely recalled, but much of it will remain in 
force. Add to this the great number of men in 
the ordinary administrative and judicial service 
of the nation, states and cities, and we have an 
enormous army of government employees, whose 
duties must be defined and compensation fixed by 
authority. It therefore becomes necessary, as a 



OF STANDARD EFFICIENCY. 6i 

matter of course, that standards of efficiency be 
established, and rates of pay fixed, such as satisfy 
the sense of fairness, and the judgment of the 
nation. 

And here is where the use and the help of eco- 
nomic science should come in, to assist the legisla- 
tor in the fixing of rates of pay and in the estab- 
lishing of standards of efficiency, by reasoning 
out the principles underlying these things; and 
this is neither more nor less than answering the 
question, what is value, what is the true and fair 
value of any given commodity, what is the value 
of an hour's labor, a day's work? 

Standards of efficiency are indeed already 
established in various lines of the government 
civil service, and to some degree in the teaching 
profession, while in both, entrance examinations 
are required. In somewhat similar fashion stand- 
ards of efficiency, which entitle to full or stand- 
ard pay, will be established in industrial lines of 
work, where such work comes under government 
control in nationalized industries, utilities, or 
transportation systems. For the comparatively 
limited number of industrial workers in gov- 
ernment employ in the past, it has been 
customary to fix the rate of pay in accord- 
ance with rates prevailing for privately em- 
ployed labor of similar kind. But the time 
is coming when the number of government em- 
ployees will be so vast as to dominate the situa- 
tion, and this custom will be reversed. The gov- 
ernment will have to base the rate of pay on 
some fundamental economic principle, instead of 
on the blind, haphazard, and unjust rates that 



6a VALUE BASED ON LABOR 

have ruled in the general business world; and 
then the standards of efficiency and the rates of 
pay established in publicly controlled work will 
be patterned after and largely adopted in such 
industries as may remain under private control. 
It is of course perfectly self-evident that the ap- 
prentice in any line of work, who just begins to 
learn his trade or profession, does not in one 
hour produce as much value as does the ex- 
perienced \vorker, and therefore could not in 
reason be entitled to the same compensation. 
Assuming a condition when the labor of the na- 
tions will be rationally organized, and I do not 
mean organized for economic defense in trades 
unions as these are known today, but organized 
for effective production, a condition toward 
which the world is fast moving, the standing of 
workers will shape itself somewhat in this 
manner : 

Vocational training in schools will be coordi- 
nated with the actual industrial work, and per- 
haps to a great extent merge with the same dur- 
ing apprenticeship. The length of actual ap- 
prenticeship will be very much reduced ; probably 
two years will be the maximum, but no truancy 
or running away to take work elsewhere will be 
permitted. The apprentice will receive pay com- 
mensurate for an apprentice, with a suitable in- 
crease perhaps every six months. After serving 
out the required apprenticeship the young per- 
son, male or female, w^ill, upon passing a proper 
test, be advanced to the grade of junior work- 
man, with a corresponding increase of pay for 
another period of perhaps two years; and w^ill 



OF STANDARD EFFICIENCY. 63 

then graduate into the class of senior workman, 
receiving full standard pay ; and will be required 
to demonstrate that he can and habitually does 
perform a fair day's work, in other words, that 
he has reached and maintains standard efficiency. 
The greater number of men will probably be per- 
fectly satisfied, and quite happy to continue in this 
grade during the active working period of their 
lives, say from about the twentieth to the six- 
tieth year, free from care, worry, or anxiety 
about their jobs, free men among their equals, 
their livelihood secure against the pecuniary dis- 
tress due to failure of employment, that in present 
society afflicts and oppresses many. Others, who 
have the ambition or desire, may advance to the 
grade of master workman and qualify as fore- 
men or supervisors with but slight if any in- 
crease of pay. All, as they advance in age, and 
gradually decline in strength and efficiency, will 
be classed as veterans with correspondingly re- 
duced pay, and finally be retired on a suitable 
pension. This briefly outlines a possible scheme 
of organizing the productive labor of the nation 
in such manner as to leave no one out of employ- 
ment, society assuming the duty of finding em- 
ployment for all, or rather of apportioning the 
same, so that no one need be without employment 
and wages. There is to be no "hindmost" for 
the devil to take. How society can find employ- 
ment and wages for all may not be clear to the 
reader at this stage; it will be more fully ex- 
plained in Part III. For the moment I can only 
repeat what was indicated on a former page, that 
there would be a sufficient flow of purchasing 



64 VALUE BASED ON LABOR 

power back to the multitude of workers to insure 
a steady consumption of goods produced, and a 
continuous "ctYective" demand for the same, so 
as to make over-production, glut, and stagnation 
of work impossible. 

This excursion into details may perhaps be 
objected to as not germane to the question of 
what is value; but it was brought in to illustrate 
and make clear what the writer means by "labor 
of standard efficiency.'' A fair day's work has 
in many callings quite a definite meaning, espe- 
cially in the building trades. There it means a 
certain number of bricks laid, so many squares 
of flooring, lathing, plastering, shingling, or 
painting. In other lines the work naturally falls 
into piece w^ork; so many shoes, hats, gloves, 
shirts, etc. Experience establishes a certain 
amount of work, which the average capable 
worker accomplishes in a certain number of 
hours with reasonable exertion, and which is 
g^enerally called a fair day's work. This is what 
T mean by work of standard efficiency, and such 
work will be expected of the graduated journey- 
man worker or senior workman ; but this does 
not imply stop-watch methods of speeding up to 
a near breaking point. 

Now, my value theory presupposes equal pay 
for all kinds of useful work of standard efficiency. 
If this be conceded, then we have in this labor of 
standard efficiency the required value denomi- 
nator; the basis and the measurer of all economic 
values, the means of determining the value of all 
general market commodities. The value and the 
price of all staple articles in the market will de- 



OF STANDARD EFFICIENCY. 65 

pend upon how many hours of this standard 
labor is embodied therein. And so far, the value 
problem is solved, reserving the question of ulti- 
macy in value determination to be taken up 
further on. 



Chapter IV. 

Economic Status of Professionals and 

Artists. 

But objection will be made against putting 
skilled and unskilled labor upon the same level 
of compensation. And some will ask : how about 
the artist, the poet, and the preacher; what about 
the inventor and the captain of industry, and 
those who follow the professions of law, medi- 
cine, or of teaching? 

As to equal compensation for skilled and for 
unskilled labor, that I shall have to discuss at 
some length; but I will not go into much detail 
in regard to the economic status of artists or of 
the learned professions. This matter could be 
brushed aside by pointing out that these people 
do not come within the purview of economics. 
They are not producers of wealth, strictly speak- 
ing, nor do they render any direct economic 
service. Only in an indirect and often very re- 
mote manner can it be claimed that they con- 
tribute to the production of material wealth ; and 
such unwarranted inclusion of things irrelevant, 
as factors in the analysis of economic problems, 
has caused confusion in economics and left the 
same with an unsolved value problem. Now 
while these people unquestionably contribute to 
welfare, especially doctors and teachers, yet they 
produce no exchangeable commodities that cir- 
culate in the market, the value of w^hich it is our 
problem to determine, and this value I propose 

66 



PROFESSIONALS AND ARTISTS. 67 

to measure by the hour unit of standard indus- 
trial labor. It is claimed that economics is con- 
cerned with wealth, not with welfare. I have 
in chapter I. severely condemned the opinion that 
would ignore welfare and exclude it from the 
consideration of economists. Let me here ampli- 
fy by saying, that economics is properly con- 
cerned with wealth, and with that welfare 
which is conditioned on a just distribution of 
material wealth, especially upon a just distri- 
bution of the nation's annual income, the national 
dividend, and upon such apportionment of em- 
ployment, as would leave in enforced idleness no 
one who is able and willing to work. With this 
wealth and welfare, artists, preachers, and the 
professions have nothing to do, or at the most 
only in a very indirect way. But a correct politi- 
cal economy has very much to do with this wel- 
fare, and so has a theory of value which would 
raise the meanest paid labor up to equal compen- 
sation with other industrial labor. 

Here I might drop the consideration of the eco- 
nomic status of the classes alluded to above. 
However, though these people stand outside the 
proper province of economics, they do not stand 
outside human society; and I do not in any way 
imply that they are engaged in activities that are 
not useful. On the contrary, most of them are 
highly useful members of society, and some of 
them eminentlv so; and a little prognostication 
may not be amiss, as to the status of these people 
under the economic regime toward which the 
world is fast drifting, and of which I feel sure 
the equal compensation feature will be a most 



68 ECONOMIC STATUS OF 

distinguishing characteristic. Lawyers, as we 
know them today, may largely disappear; they 
will probably become salaried functionaries ot 
the courts, assisting in the dispensation of jus- 
tice, rather than using their wits to block justice 
in the interest of their clients, as so often is the 
case today. Doctors and teachers, while a com- 
paratively small number may follow their pro- 
fession privately, by far the greater number will 
be publicly employed as are the public school 
teachers now, and at salaries that are approxi- 
mately on a level with the compensation of skilled 
mechanics. Like the police, guardians of peace, 
and fire department men, guardians of fire pro- 
tection, doctors will be guardians of health and 
sanitation, on duty in hospitals, dispensaries, 
bureaus, and medical call stations; and they will 
be publicly employed at salaries similar to those 
paid other administrative employees generally. 
Let it be remembered, and fully realized, that the 
compensation of all such public employees, whose 
labor does not result in concrete material objects 
which in themselves embody the value of their 
work, that all these employees must be paid from 
a fund created by contributions from or taxes 
upon the producers of actual economic wealth, 
the great laboring multitude, or by fees exacted 
from them. When this is fully realized, and 
when we know that in a real democracy this mul- 
titude make up the voting constituency whose 
final sanction upon questions of taxation is 
necessary, as well as necessary for the granting 
of salaries and compensation for public employees 
of all sorts, then we may well assume that a senti- 



PROFESSIONALS AND ARTISTS. 69 

ment for approximate and reasonable equality of 
compensation in these various lines of work will 
be distinctly dominant. As to the artist, the poet, 
and the preacher or moralizing philosopher, all 
these stand distinctly outside the scope of eco- 
nomic consideration ; and the value or worthless- 
ness of their work has nothing to do with eco- 
nomic value and its determination. It is simply 
childish to include in the discussion and analysis 
of economic value such things as the decalogue, 
pictures or sculptures by dead or by living mas- 
ters, old coins or other archeological curios, the 
value of a horse to a fleeing prisoner, or the 
value of a plank or a life preserver to a drown- 
ing man. The value of a horse or a plank must 
be determined under ordinary conditions in the 
market of economic exchange, not under special 
or abnormal conditions as means of saving men's 
lives. Curios and works of art do not belong in 
the realm of economics. Artists, poets, and 
preachers will have to find their pecuniary status 
much as they do today, with this difference: in 
the future society there will be no occasion for 
artists or for any kind of misfit genius to starve 
in a garret; for if their art should fail to support 
them they could always find the doors of some 
public employment office open, with opportunity 
of earning a decent livelihood by honest labor of 
some suitable kind. What has been stated about 
artists and poets does also largely apply to in- 
ventors, captains of finance and industry. The 
function of a captain of finance will probably be- 
come obsolete; the captain of industry may or 
may not find a place in the new order; if so, he 



^o ECONOMIC STATUS OF 

and the inventor will be in a special class, and 
will be compensated according to what the gen- 
eral opinion deems fair and just. The work oi 
poets, prophets, and philosophers may be worth- 
less, or it may be valuable beyond estimate in 
money or money equivalents. Very likely such 
work would not be appraised quickly, generally 
not before the latter years of such lives; and it 
would quite generally be performed during hours 
of leisure from livelihood pursuits, as indeed is 
largely the case now, and its reward would most- 
ly be in honors rather than in things pecuniary. 
If, however, the people at any time see fit to 
bring their offerings, or to tax themselves, in 
order to bestow high pecuniary rewards upon 
some artist, musician, singer, actor, or circus 
clown, poet or preacher, inventor or scientist; or 
to pay princely salaries to a king, president, gov- 
ernor, mayor or high court judge, so let them do, 
as long as in their judgment the 'services of 
these people are worth such price. But all this 
is apart from economic value, and has nothing 
to do with determining the value of a day's work 
at ordinary economic labor, the labor that pro- 
duces subsistence and material wealth. 

Just one more thought in this connection to 
show the falsity of men's value estimates, and 
how absurdly the world has been in the habit 
of overestimating the importance of artists and 
inventors, and underestimating the humble toiler, 
especially the tiller of the soil. Suppose Caruso 
and Paderewski should die tomorrow and no one 
be competent to take their places. Would the 
world stand still? The papers would announce 



PROFESSIONALS AND ARTISTS. 71 

the fact, and the next day these men would 
merely be a memory and a name, except in the 
little circle of their immediate family and per- 
sonal friends, beyond which their passing would 
scarcely be felt. Suppose Edison and the others 
had not given us the electric light and the phono- 
graph; would anyone sit down and cry about it? 
Not at all, but if there should be a great crop 
failure, many might have occasion to weep, and 
quite a number might perish. What has the in- 
vention of the aeroplane, the dirigible, and the 
submarine done for the world? Made war more 
horrible, and so far nothing else, and I doubt if 
they really ever will be anything else than means 
of destruction or toys for fools. Suppose that 
for ten years to come all inventors were to stop 
work, nothing at all was to be invented, would 
anyone cry or be in distress? By no means, in 
fact no one would feel the difference. But let all 
the farmers stop work for a single year and the 
race would perish. Who then is the more im- 
portant, the farmer or the inventor ? The ques- 
tion answers itself; and here is hoping that the 
answer may permeate the heads of bumptious 
individuals, whom chance of birth and fortune 
has placed in favored positions, from which they 
look down with supercilious contempt upon the 
humble tiller of the soil. May the answer dis- 
solve out of such heads some of that self-conceit 
which is one of the chief curses of the human 
race. I could continue to discourse along this 
line on many pages, but this would weary some 
readers, so I break off. I have tried to show 
that certain people, and their work, have been 



72 ECONOMIC STATUS OF 

very much overrated; also that the w^ork of 
these people does not enter into the analysis and 
determination of economic value, and does not 
necessarily enter into the equal compensation 
scheme. Yet some of them v^^ill come completely 
under the influence of that scheme, and all w^ill 
be greatly affected thereby, directly or indirectly. 
Before passing on I v^^ant to corroborate what 
I have here maintained as to the work of artists 
and the learned professions being not productive 
of material wealth, and not coming within the 
proper province of economics. And I do so with 
a quotation from an accredited economist, J. L. 
Laughlin, at that time professor at Harvard Uni- 
versity. He says : "We can see then, that in the 
wonderful mechanism of society, men are work- 
ing to produce wealth, and to satisfy one another's 
material wants. All the world, so far as they 
are thus engaged in supplying their material 
wants, are doing things with which political 
economy is concerned. If men are occupied with 
other affairs than these, they are not things with 
which the economist is concerned. Political 
economy deals only with questions connected with 
wealth, and with the satisfaction of material 
wants. But according to some writers, not all 
wealth is material. You can see and touch a nail, 
a basket, a gun, land, or diamonds; but this is 
not true of all things. You cannot see or touch 
capacity or mental power. If these things can 
be called wealth, they are not material wealth, 
and are not capable of being transferred from 
one person to another as a coat or a hat may. 
Most people are engaged, directly or indirectly, 



PROFESSIONALS AND ARTISTS. 73 

in collecting material wealth, and as only such 
wealth can be appropriated and exchanged, we 
shall be understood as speaking of material 
wealth hereafter, unless particular mention is 
made of immaterial wealth/' Condensed from 
pages 4, 5, and 6, introductory chapter of "Prin- 
ciples of Political Economy," by J. L. Laughlin; 
Appleton Science Series edition, 1888. 



Chapter V. 

Equal Value of and Equal Compensation 
FOR All Kinds of Skilled Labor. 

The next step in my argument will be to show 
reasons why skilled and unskilled labor should 
be estimated of equal value, and should be com- 
pensated at the same rate hour for hour. I realize 
that here I am up against an almost unsur- 
mountable mountain of prejudice, fortified by 
centuries of custom; and I almost lose heart as 
I think of it. But the gauge of battle has been 
thrown, and there must be no shirking. I shall 
begin then by attacking this prejudice at its weak- 
est point; and that is by arguing the essential 
equality in point of worth and value of the various 
mechanic trades. 

Upon what grounds of reason should the work 
of the tailor and his product be esteemed more 
valuable than the work of the shoemaker or the 
hatter? That of the blacksmith, machinist, or 
molder of greater value than that of the carpenter 
or mason, painter or tinner? And so on down 
the long line of mechanic trades, all of which are 
indispensable and enter into the make-up of man's 
daily necessaries, food, clothing, and shelter. But, 
it will be said, w^ork ought to be paid according 
to the skill of the worker. Well then, please tell 
me, whoso can, which of these trades involves 
the greater skill? Mason, molder, machinist; 
tinner, carpenter, tailor, miller, weaver, painter, 
etc. Is it the mason or is it the plumber, trades 

74 



FOR Ahh KINDS OF SKILLED LABOR. 75 

which long have ranked high in point of wages ; 
some thirty years ago nearly double that of the 
carpenter and cabinetmaker, though these un- 
doubtedly required a higher order of skill. Who 
shall decide this among all the numerous trades ? 
Shall it be left to each trade to decide whether 
itself is the most skillful, most important, and 
therefore entitled to the highest rate of pay ? Evi- 
dently not; the thought is as absurd as letting a 
claimant in court decide his own case. What then 
shall we do; how shall we decide this question? 
Let it be remembered that the reward for labor 
should have some regard to the irksomeness, the 
burdensomeness of the work, to what economists 
have called the labor pain. Of this more will 
be said presently. Let it also be remembered 
that the lesser the skill in any branch of work, 
the coarser it usually is, the heavier, the more 
burdensome and exhaustive the toil. This should 
be taken into consideration to offset the higher 
skill as a value element. And the more we puzzle 
over the problem, the more must we come to the 
conclusion that the only solution is to award 
equal compensation, hour for hour, in all kinds 
of skilled trades. How are these rates of pay 
fixed under the conditions of present society? 
By the illogical, crude, haphazard method of 
competition under an alleged law of supply and 
demand; by an abominable grab and catch as 
catch can scramble for vantage. Or rather they 
are not settled at all ; for, as a fact, these matters 
continue in a state of turmoil and trouble, of 
chaos and disorder, causing no end of strikes and 
disputes, often attended by violence. No sooner 



76 EQUAL VALUE AND COMPENSATION 

has one trade gone on a strike and gained an ad- 
vance in pay than another starts, and then 
another, or several at the same time. And when 
the last strikers have gotten their raise, the first 
start over again. This cannot go on forever. A 
way must be found to settle the wages question 
so it will stay settled; a way that will make an 
end of the industrial war, the strife and the 
strikes. A principle must be found upon which 
to determine, once and for all, the wages of labor 
with a fairness that is beyond dispute and is ap- 
parent to every reasonable and open-minded 
man. And that is the principle of equal compen- 
sation, the basis of the value theory propounded 
in this book. 

I remember hearing my father tell how in his 
own young days he participated in the frequent 
brawls indulged in by various crafts; how the 
members of one craft hated and despised the 
members of another craft, resulting in regular 
fights, such as even now take place between young 
rowdies of one neighborhood with the street 
rowdies of another neighborhood, or between the 
larger boys from rival schools. It seems the tail- 
ors were especially made the victims of the ani- 
mosity and contempt of the more robust mechan- 
ics belonging to other crafts; but all united in 
heaping contempt and scorn upon the tiller of the 
soil. The literature of those times, and indeed 
of our own days, will bear witness to this fact, 
and prove that this hateful and unbrotherly spirit 
still survives in an altogether too large measure. 
Practically all comic prints are still engaged in 
the task of heaping contempt upon farmer Hay- 



FOR ALL KINDS OF SKILLED LABOR. ^^ 

seed and Corntossel, and are using such expres- 
sions as "rube," ''country jay/' and the Hke. 
Men have hated and injured each other in the 
past because of difference of race, nationaUty, 
and rehgion; and also because of difference of 
calHng, difference of work. How foohsh, how 
unspeakably foolish. A great deal of this still 
remains, but much has been done away with, due 
to the growth of tolerance and of general intelli- 
gence. And but little remains of jealousy, malice, 
and hatred among the various skilled trades. 
This is due to the many fraternities of various 
kinds, and especially due to the trades unions, 
their central labor unions, and the national fede- 
ration of labor, as well as to the socialist propa- 
ganda. Is it too much to hope that these men are 
ready for that widening of heart and mind which 
would accord to other crafts the same usefulness, 
worth, and value, and therefore the same rate of 
pay that is claimed for their own ? To doubt this 
would be to deny them capacity for ordinary rea- 
son, honesty, and common sense. 

Let us suppose that a number of crafts, from 
A to Z, are under the jurisdiction of some cen- 
tral labor union ; and that of these crafts, A forces 
its rate of wages up to say $5.00 per day. After 
a while craft B does the same ; then craft C, and 
so do from time to time all the rest down to X, 
Y, and Z. Is it to be supposed for a minute, that 
the other crafts which had effected a $5.00 rate 
would oppose crafts X, Y, and Z, in doing the 
same? No, that would be unthinkable for the 
mere shame of it. Can it even be supposed that 
crafts A and B would argue that if crafts X and 



78 EQUAL VALUE AND COMPENSATION 

Y got $5.00, then A and B ought to get $6.00 or 
$7.00 per day? Yes, this can be supposed as 
long as the minds of men are perverted by false 
notions of value, taught and upheld by a false 
economic doctrine, according to which the world 
of business and its rewards are looked upon as 
being like the uncountable fishes in the boundless 
seas, where a man's catch depends mostly upon 
his luck and the weather's favor. According to 
this idea, if one man catches twice as many fish 
as his neighbor, that is purely a matter of chance 
and good fortune; and is in no wise dependent 
upon the ill-luck of the neighbor, nor is it 
achieved at the expense of the neighbor. And 
much like this is the general notion about the re- 
wards of business and the rate of wages, which 
is supposed in some vague manner to depend 
upon a mysterious wages fund, instead of being, 
as it really is, drawn directly or indirectly from 
the ultimate consumer. But when it is clearly 
and distinctly understood that wages and salaries, 
profits and dividends, in any line of economic 
work productive of material wealth, are paid by 
the ultimate consumer ; that, in the final analysis, 
the wages of men in craft A are paid by the 
men in B, C, D, on down to Z; the wages of 
men in craft B, by those in A, C, D, and all the 
rest, and so on along the whole line; those of Z 
are paid by all the rest ; when this is understood, 
then the whole wages question will be seen in an 
altogether different light; and it is hardly to be 
expected that the members of any one craft or 
calling would have the nerve or the impudence 
to claim for their particular craft a higher rate 



FOR ALL KINDS OF SKILLED LABOR. 79 

of pay than they were wiUing to accord another 
craft. If they did, they would probably be 
laughed at. 

Lest the reader should overlook it, let me re- 
mind him that I am speaking of mechanic trades, 
so-called skilled labor, not of professionals or 
artists, or any of those who might claim special 
compensation on special grounds. The case of 
such has already been discussed, and may be 
further considered later on. But the present 
argument deals with mechanics and workers in 
the various industries; particularly with those 
engaged in producing the staple necessaries of 
life; those things that constitute the food, cloth- 
ing and shelter, and the ordinary comforts of 
people in general ; those things of which the mass 
of the people are the ultimate purchasers and con- 
sumers, and the production of which furnishes 
by far the greater part of the world's employ- 
ment. It is true, that a certain percentage of 
employment is yet furnished by the rich, the well- 
to-do, for luxuries and personal service. And 
a century or two ago that percentage was so 
large that some of the older economists must 
have believed it was the rich who furnished prac- 
tically all employment for labor ; and this thought 
does indeed in a measure underlie the wages 
fund notion. But times change, the old order 
gives place to the new. With the rise of the 
people and the growth of democracy, the center 
of economic gravity has shifted, and the source 
of employment is now mainly in the multitude 
itself. And it is realized that even the money 
which the rich spend for luxuries and for per- 



8o EQUAL VALUE AND COMPENSATION 

sonal service, and by which they furnish a cer- 
tain amount of employment, even this money is 
in great part acquired by exploitation of labor or 
by profiteering upon the consuming public. How- 
ever, this is a phase of economics which I do not 
intend to discuss in this treatise on value. I claim 
my value theory to be true irrespective of whether 
land is held as private property or not, true under 
private capital or collective. As long as profit, 
interest, and rent continue, these will merely be 
minor items added to the cost and included in 
the selling price of commodities; an increase of 
cost and of price which will diminish as collec- 
tive capital gradually replaces private capital, 
and as collective ownership of land supersedes 
private ownership. These matters also lie be- 
yond the scope of this book. But I repeat, be- 
cause I want to emphasize it, and it can not be 
too much emphasized, that as far as the ordinary 
necessaries of life, the great staples of produc- 
tion and of business are concerned, the multi- 
tude are the ultimate consumers; and it is they 
who in these lines of work furnish the employ- 
ment and really pay the wages of the labor in- 
volved. I also want to emphasize that it is upon 
these things, the great staples of production, and 
upon their abundance, or at least their sufficiency, 
that the well-being of a nation depends ; and with 
these things particularly, and with their proper 
evaluation, are my economics and my value theory 
concerned. These things in particular are as- 
sumed to have equal value for equal length of 
labor time embodied therein, such labor being 
of standard efficiency as explained on a previous 



FOR Ahh KINDS OF SKII.I.ED I,ABOR. 81 

page ; and hence also such labor is of equal value, 
and entitled to equal compensation, hour for hour^ 
This, it seems to me, ought to be perfectly clear 
to all skilled workers, that insofar as any one 
class among them is useful, produces a useful or 
necessary commodity, or renders an essential 
service, then the labor in that class should be 
accorded equality of value, and equal compensa- 
tion with the others. Any one trade which would 
insist on higher compensation than the others, 
would simply show a desire for a little profiteer- 
ing for itself. 

Suppose there is after all a slight difference in 
point of skill or in burdensomeness between cer- 
tain trades. It is not possible now, and it will not 
be possible then, to calculate these matters to an 
extreme nicety, to a minute fraction of a cent. 
Greater deviation from minutely exact justice in 
the setting of wages and assignment of value 
obtains in present competitive catch and grab 
society, than would be occasioned by equality of 
compensation for work of standard efficiency; 
and what slight deviation from exact adjustment 
in these matters there would remain, that should 
be accepted on the principle of "bear ye one 
another's burdens." We cannot in any event 
escape a certain measure of bearing another's 
burdens even now. Two men buy clothes at the 
same time, of the same quality, in the same store, 
and pay the same price, though one, being large, 
may require 10 to 20 per cent, more goods in his 
suit than the other who is small. The same with 
shoes or anything else in the way of clothing or 
wear. A hearty eater pays no more for a meal 



82 EQUAL VALUE AND COMPENSATION 

in a hotel or restaurant than the man with a 
small appetite. The 100-pound man pays the same 
fare on car or train as the 200-pound man; and 
on street cars long and short trips are paid alike. 
Similarly with postage. In these matters it is 
simply impossible to make calculations to a min- 
ute fraction of a cent and charge accordingly; 
such things must be averaged within reasonable 
limits, and so should be the compensation for 
standard labor. This is necessary in order to 
stabilize society, bring order out of economic 
chaos, secure industrial peace, and establish real 
brotherhood among men. 

Some mechanics may still insist that their par- 
ticular trade requires unusual skill, and a long 
apprenticeship to acquire the same. Such no- 
tions are now obsolete, whatever reasonable 
grounds there may have been for them in days 
past. With vocational training, manual and tech- 
nical schools, and the greater mental alertness of 
modern young people, with the general all-around 
increase of intelligence, and with the increasing 
sub-division of labor, the days of long apprentice- 
ship are gone. Two years will probably be the 
limit, and in many trades it might be less. The 
arbitrary lengthening of time for, and curtailment 
of numbers of apprentices in order artificially to 
create a scarcity of members, and thereby boost 
the compensation in any trade, will not be 
countenanced when order, system, and regula- 
tion take the place of disorder and arbitrary 
forcing; when the labor of the nation is organ- 
ized for production, instead of for defense in the 
economic struggle for livelihood. 



FOR ALL KINDS OF SKILLED LABOR. 83 

I hope every fairminded reader of these Hnes 
will agree that the different trades should receive 
the same compensation, because all are useful 
and necessary or indispensable. But whose 
labor is more useful and more indispensable than 
that of the farmer, the tiller of the soil? It is 
he upon whom all depend for food, at least for 
the raw material^ both of food and of clothing". 
He is the peer of any in point of usefulness; to 
him really belongs the place of honor as the 
most indispensable of all workers. He furnishes 
much food ready for consumption, and the raw^ 
materials for most of the staple food products, 
as well as the raw material for textiles and a 
variety of minor items in the list of raw mate- 
rials. This man's work certainly is entitled to 
the same value estimate, and therefore to the 
same compensation as any of the skilled trades. 
The same reasoning applies to the coal miner, the 
man whose work probably is the most burden- 
some, as well as the most dangerous. Civiliza- 
tion as it is known today would be impossible 
without a plentiful supply of fuel; and of fuels, 
coal is the principal source, and for many pur- 
poses the most suitable kind. The value of the 
coal miner's work cannot in reason and fairness 
be estimated at any lower rate than that of other 
industrial workers. Clearly, this miner must be 
accorded a place in the equal compensation 
scheme. So also the miner of zinc, lead, copper, 
and iron ore. What would the world be without 
iron and steel? Civilization could simply not 
exist without iron. All tools and all machinery 
of production, as well as of transportation, de- 



84 EQUAL VALUE AND COMPENSATION 

pend upon iron. Hence we find the work of the 
iron miner and smelter as indispensable, as use- 
ful, and as worthy of esteem as any other of the 
skilled trades, and fully entitled to equal compen- 
sation with the rest. 

But the products of the farm and the mines as 
well as the multitudinous manufactured goods 
must be transported in order to reach the place 
of consumption, the place of realized utility. And 
this calls for the work of a large number of men 
laboring in transportation by land and by water : 
teamsters, wagoners, sailors, railroaders, etc. Any 
person of but ordinary intelligence will realize at 
once that the transport worker is as needful for 
the existence of organized society as is the more 
direct producer of the goods transported; and 
it should not be necessary to dwell upon this at 
any length. Division of labor is a fact, based 
upon this other fact, that division and subdi- 
vision of labor increases the productive power of 
labor manifold; and also based upon this further 
fact, that the various raw materials which enter 
into one article of manufacture often have to be 
brought together from widely separated localities. 
The staple food materials, raised almost wholly 
in the country, must be transported to cities and 
manufacturing centres ; and much of it is carried 
back again to the country, after it has passed 
through the various processes of manufacture. 
All this, or at least a great amount of transpor- 
tation, is unavoidable and indispensable, and this 
of course implies that the labor of the transport 
worker is indispensable, or, to say the least, is 
useful and necessary, and therefore of equal 



FOR Ahh KINDS OF SKII.I,ED LABOR. 85 

value and worth with other useful and necessary 
work, and hence is entitled to a place in the equal 
compensation scheme. What has here been said 
about the worker in transportation, applies with 
equal force to all those who work in stores and 
warehouses, in wholesale and retail mercantile 
work, the merchant class, and all their help, in 
office, storeroom, and salesroom ; everyone whose 
labor in any way serves the process of distribu- 
tion, the connecting of producer with the con- 
sumer. All this work is likewise indispensable, 
necessary, useful, and therefore entitled to the 
same value estimate as other work; and the per- 
sons engaged therein have an undeniable right 
to a place in the equal compensation scheme with 
the rest of useful workers. 

That the immense army of workers, in their 
multifarious variety of work, on field and farm, 
in mine, mill, and workshop, on railroad, ship, or 
wagon, in store and office, the producers and dis- 
tributors of material wealth, of all the necessaries 
and comforts of life, that these are all alike 
needed, all alike useful and important, that seems 
to me so clear, that even a child might under- 
stand it; and that therefore, in reason and con- 
science, they should be esteemed equally worthy 
and valuable, and entitled to equal compensation, 
hour for hour, when arrived at standard effi- 
ciency, that seems to me equally clear. Moreover, 
let it be remembered that this multitude of work- 
ers, the producers of wealth, that these also con- 
stitute the bulk of consumers, and as such furnish 
employment for each other; and since the pur- 
chase of products is really an exchange of prod- 



86 EQUAL VALUE AND COMPENSATION 

ucts, and in the final analysis an exchange of 
labor, therefore equal pay hour for hour really 
means an exchange of labor with your brother 
man on the basis of hour for hour, on the basis 
of giving one hour of your work for one hour of 
his. Let it furthermore be remembered that this 
equal compensation, hour for hour, for all use- 
full productive work, gives us a rational and equi- 
table basis of value, a means of determining the 
value of all material products according to the 
hours of standard labor embodied therein; and 
that this will settle, at once and for good, all dis- 
putes about rates of pay, eliminate strikes and 
lockouts, and stifle in men generally the desire 
to exploit their fellowmen; will bring industrial 
peace, and will do more than aught else to estab- 
lish lasting peace between the nations of this 
earth. Who is there so narrowly selfish, and so 
shortsighted, as to refuse welcome to such a gos- 
pel of industrial peace, of harmony, and brother- 
hood, of salvation from economic chaos? 

The demand for equality of pay for equal work 
regardless of sex is already quite common, and is 
generally accepted as reasonable and just. Why 
not also equality of pay regardless of trade or 
line of work? If it is right to place men and 
women upon equality in the matter of compen- 
sation, why not men and men ? When it becomes 
clear, that rightly understood, men's work, in 
point of value, is equal when of standard effi- 
ciency, no matter in what particular line of pro- 
ductive activity, who then can any longer oppose 
this idea of equal compensation ? 



Chapter VI. 

Equal Value of Skilled and Unskilled 

Labor. 

I have not yet discussed the status of so-called 
unskilled labor; and I know full well that the 
attempt to include this class of labor in the scheme 
of equal compensation will meet the most emphatic 
objection from the great majority of skilled work- 
ers, those immediately above the unskilled in 
economic standing and income. This exempli- 
fies a universal human weakness and defect of 
character. Men are quite anxious to see justice 
done as long as it imposes no sacrifice upon them- 
selves, takes from themselves no cherished pre- 
rogative or accustomed advantage. When that 
is threatened, then the whole matter assumes a 
different aspect ; men become totally blind to jus- 
tice, or it becomes so vague and remote a thing as 
to be lost to sight and to consciousness, while the 
threatened privilege assumes large proportions, 
and seems so sacred and important, that to touch 
it appears to them as the grossest injustice, and 
calls for bitter resentment. But such is this poor 
humanity, and so backward is it still, in its age- 
long struggle to evolve from a status like unto a 
predatory animal toward that of a really human 
being, brotherly and helpful, that, as yet, man is 
not quite willing to grant to those he looks upon 
as standing below him the same consideration, 
and the same rights, that he so vociferously claims 
for himself. The middle class, having gained 

87 



88 EQUAL VALUE OF SKILLED 

the franchise, were unwilling to extend the same 
to the lower orders; and the males, generally 
speaking, having now the right to vote, are very 
reluctant about granting the same right to fe- 
males, justifying that refusal upon some pretext 
quite satisfactory to themselves, though not so 
convincing to the women. Stubborn is the innate 
self-considering disposition of man, and if certain 
customs and usages that have existed for centu- 
ries are in accord with that disposition, it becomes 
an almost hopeless task to combat the same. Such 
is the age-long custom of paying unskilled labor 
the meanest wages, a bare, pitiful, subsistence 
wage; and the skilled workers, accustomed to 
think that perfectly right and proper, fully be- 
lieve that their own labor possesses double and 
three-fold the value of unskilled labor, and also 
double and three-fold value producing po- 
tency. This conviction has been shared by all 
the world, by the educated classes, by scholars 
generally, and by the teachers of political econ- 
omy, and even by the victims of that usage, the 
unskilled laborers themselves. But the time has 
come for demonstrating that this is all wrong, 
that this is an utterly false notion, and that it is 
the very source and spring of social injustice; 
that it perpetuates poverty and slums, puts man 
at enmity with his fellow man, and fills his heart 
with the spirit of Cain. 

I propose to show, and largely by the aid of 
accepted economists, that the prevailing valua- 
tion of unskilled labor is false, is based on 
failure to understand labor sacrifice; that it is 
an inherited after-eflfect of ancient and medieval 



AND UNSKILLED LABOR. 89 

slavery; that even under the present economic 
regime, and under the sanction of conventional 
economic principles, this false valuation of un- 
skilled labor is doomed to pass away; that even 
now a distinct tendency toward equalization of 
pay can be discerned; that under the influence 
of increasing general and vocational education, 
and under the organizing tendency of the present 
time, this fifth and last ''estate," the unskilled la- 
borers, this sub-proletariat, will demand redress 
for its age-long subjection and despoilment; and 
that this demand may be attended with more or 
less violence, if it is not met in a proper and con- 
ciliatory manner by the other elements of human 
society. 

I shall take up these propositions one by one, 
in the order as stated above, beginning with the 
assertion that the prevailing value estimate put 
upon unskilled labor is a false one, due to a fail- 
ure properly to apprehend the meaning and sig- 
nificance of what economists have called labor 
sacrifice or labor pain. Turning to Adam Smith, 
the father of political economy, let us see what he 
says on the subject in Wealth of Nations, Book 
I, chap. V: 

"Labor is the real measure of the exchange 
value of all commodities. The real price of every- 
thing; what everything really costs the man who 
wants to acquire it is the toil and trouble of ac- 
quiring it. What everything is really worth to 
the man who has acquired it, and who wants to 
dispose of it, or exchange it for something else, 
is the toil and trouble which it can save himself, 
and which it can impose upon other people. What 



90 EQUAL VALUE OF SKILLED 

is bought with money or with goods, is purchased 
by labor as much as what we acquire by the toil 
of our own body. That money or those goods 
indeed save us this toil. Labor was the first price, 
the original purchase money that was paid for 
all things.'^ (p. 26.) 

"Equal quantities of labor, at all times and at 
all places, may be said to be of equal value to the 
laborer. In his ordinary state of health, strength 
and spirits; in the ordinary degree of his skill 
and dexterity, he must always lay down the same 
portion of his ease, his liberty and his happiness." 
(p. 28.) . 

This laying down by the laborer of his ease, 
his liberty and his happiness, has by later econo- 
mists been called labor pain or labor sacrifice; 
and this Adam Smith declares is always of equal 
value to him who makes this sacrifice; and also 
to him who escapes this sacrifice by having 
others make it for him. 

Again quoting Adam Smith, chap. VI: "If 
among a nation of hunters, for example, it usual- 
ly costs twice the labor to kill a beaver which it 
costs to kill a deer, one beaver should naturally 
exchange for, or be worth two deer. It is natural 
that what is usually the produce of two days* 
or two hours' labor, should be worth double of 
what is the product of one day's or one hour's 
labor." (p. 41.) 

"In this state of things the whole produce of 
labor belongs to the laborer, and the quantity of] 
labor commonly employed in acquiring or pro- 
ducing any commodity is the only circumstance 
which can regulate the quantity of labor which it 



AND UNSKILLED LABOR. 91 

ought commonly to purchase, command, or ex- 
change for." (p. 42.) 

Condensing the above statement it comes to 
this: The quantity of labor necessary to pro- 
duce any article is the only thing which can de- 
termine the quantity of labor that such an article 
ought to exchange for. 

Henry C. Carey, the American economist, 
describing the assumed beginning of human 
association, division of labor, and exchange of 
products, says : And these circumstances natural- 
ly lead to a system of exchanges in which each 
seeks to obtain day's labor for day's labor em- 
bodied in the article exchanged. "The idea of 
comparison is inseparably connected with that 
of value. We compare the commodities pro- 
duced with the labor of body and mind given 
for them. In exchange the most obvious mode 
is to give labor for labor ; and each watches care- 
fully that he does not give more than is given in 
return." 

"Having made a crude axe, there is an imme- 
diate change in the value of fuel previously pro- 
duced, because it can now be produced with less 
labor; but the value of things not produced by 
the use of the axe remains unchanged. If one 
has surplus of fish, the other surplus of fuel, the 
latter must now give twice as much fuel in ex- 
change as before, since the fuel is produced by 
half the labor effort." (Carey's Social Science, 
condensed by McKean, pages 83 and 84.) 

F. von Wieser, the Austrian economist, him- 
self an opponent of the labor cost theory of value, 
makes this statement: "The opponents of the 



92 EQUAL VALUE OF SKILLED 

labor cost theory of value do not in my opinion 
do it justice. They try to disprove it completely, 
whereas it is by no means entirely false. It is 
conceivable, but does not fit in with facts; it is 
philosophically true, but not realized in practice. 
It is possible to conceive a condition of economic 
life, under which the single consideration of the 
sacrifice involved in labor would determine the 
value both of the labor itself and of all products." 
(Natural Value, translated by C. A. Malloch, p. 
194.) 

Francis Wayland, an American university 
president and professor, makes this statement: 
''No man would exchange what has cost him two 
days' labor for that which has cost another of 
the same skill but one day's labor. Thus if a 
hundred pounds of fish could be procured by 
one day's labor, and only twenty-five pounds of 
venison, men would exchange, not pound for 
pound, but labor for labor, that is, at the rate 
of four pounds of fish for one pound of venison. 
The amount of labor expended in the creation 
of value is commonly called its cost. This is al- 
ways the standard by which for long periods the 
degree of exchangeable value is estimated.'' 
(Elements of Political Economy, p. 20.) 

John Stuart Mill says : "Labor is either bodily, 
or mental, muscular or nervous; and this idea 
includes, besides the exertion itself, all feelings 
of a disagreeable kind, all bodily inconvenience 
or mental annoyance caused by the employment 
of muscles or thought in a particular occupation." 
(Principles, Book I, chap. I, p. 45.) 

Professor Davenport, in his Value and Dis- 



I 



AND UNSKILLED LABOR. 93 

tribution, p. 62, quotes Cairns, and says of him : 
Cairns' special task was the rehabilitation of the 
labor cost theory of value, after the damage vis- 
ited upon it by Mill's half-hearted support or par- 
tial abandonment. In his (Cairns') Leading 
Principles Restated, labor is set up as the value 
determinant; however not in terms of time but 
in terms of pain, burden, irksomeness. "Cost 
means sacrifice, and the problem of cost of pro- 
duction, as bearing on value, is to ascertain how 
far, and in what way, the payment thus made 
by man in the barter between him and nature 
determines the exchange value of the products 
which result." (Chap. Ill, Sec. 5.) 

On page 69, Davenport says : "Ricardo had as- 
sumed without argument that as a general propo- 
sition, and in broad averages, wages are paid 
in proportion to the painfulness of employment; 
and he again quotes Cairns to this effect: "If 
wages really stood in any constant relation to that 
which really constitutes the laborers' cost, then 
wages in all occupations and in all countries and 
at all times would be in proportion to the toil 
which the wages compensated." 

Professor J. L. Laughlin, formerly of Har- 
vard, makes these statements: "The capitalist 
undergoes sacrifice of abstinence, and the labor- 
ers' exertion or expenditure of physical or mental 
energy is sacrifice to him." (p. 112.) "By con- 
sidering 'cost' as sacrifice we give due importance 
to the sacrifice of the laborer as well as to that 
of the capitalist." (p. 113.) "Where competition 
is free, commodities exchange for each other in 
proportion to their 'cost' or 'sacrifice' of produc- 



94 EQUAL VALUE OF SKILLED 

tion. That is the law of normal value of manu- 
factured goods." (p. 117 Elements of Politi- 
cal Economy, Appleton edition, 1888.) 

I also quote John Ruskin who, though not 
classed as an economist, was a philosopher and 
stands high among English men of letters. He 
says in Munera Pulveris, pp. 59 and 60: ''All 
cost and price are counted in labor; we must 
know therefore first what is to be counted as 
labor. Labor is the suffering in effort. The 
cost of anything is the quantity of labor neces- 
sary to obtain it. Quantity of labor is expressed 
by the time it lasts ; so that the unit of labor is an 
hour's work, or a day's work." 

Here then is a list of writers, which probably 
could be extended to a wearisome length, seven 
of them accepting Adam Smith's conception of 
labor sacrifice, or labor pain, as the ultimate es- 
sence of value, and the original purchase price 
of every labor product, of every commodity, of 
every service and of every article of exchange ; a 
sacrifice which in sound logic must be accepted as 
equivalent, man for man, hour against hour, day 
for day. All of these writers no doubt intuitively 
recognized the truth and the justice of such a 
conception, but all of them quickly discarded this 
conception, and reasoned themselves away from 
this truth, because on second thought they could 
not make it fit into the actuality of the human 
life of their day. It did not fit, and could not be 
made to fit into a societary life and system based 
on force *and fraud, on oppression and over- 
reaching and the never-ending effort on the part 
of the stronger and more cunning to despoil the 



AND UNSKILLED LABOR. 95 

weaker, with the crafty and alert ever aiming 
to cHmb upon the shoulders of the "man with 
the hoe," putting upon his back a four-fold share 
of the world's labor pain, "the burden of the 
world." 

In the days of Adam Smith it would have been 
absolutely futile to follow up the labor sacrifice 
theory to its logically final conclusion, and to 
attempt its application as I propose to do now. 
Perhaps there were men in Smith's day, and 
prior to him, who did try to do this. If so, they 
have been securely buried in oblivion. Smith 
wisely gave the world but a glimpse of this truth, 
and then hastily turned off the light. Whether 
he did so consciously and on purpose I do not 
know, nor does it matter. Let us remember that 
he wrote his Wealth of Nations in the years from 
1767 to 1776, before the American Declaration 
of Independence was proclaimed, and twenty 
years before the French Revolution; at a time 
when serfdom and semi-bondage still were com- 
mon throughout Europe, especially for agricul- 
tural laborers; when slave hunting and slave 
trade were still carried on, and when actual chat- 
tel slavery was a recognized institution in English 
colonies and in the United Siates, and so re- 
mained for nearly another hundred years. At 
such a time, and under such circumstances, it 
would have been sheer folly to talk about equal- 
ity of compensation for all kinds of useful work, 
including the work of the unskilled laborer. 

This is not the place for any lengthy disser- 
tation upon the age-long story of the enslave- 
ment of man by man, the weaker by the stronger. 



96 EQUAL VALUE OF SKILLED 

Someone has said that the history of the human 
race is Httle else than a record of the efforts of 
the powerful few to tax the many, and the strug- 
gle of the many to escape such taxation. H. C. 
Gary (p. 170) puts it this way: "The history 
of the world is little more than a record of the 
efforts of the powerful few to interfere with the 
labor of the many and thus to enslave them/* 
And we may now express the same thought in 
this way: The history of the zvorld is little else 
than a record of the efforts of the shrewd and 
strong to unload upon the shoulders of those be- 
low them an undue amount of that labor pain 
which must be borne by man if the race is to live 
in a condition of comfort and security of sub- 
sistence. When Adam Smith formulated his eco- 
nomics the American Declaration of Inde- 
pendence had not yet been written; nor had the 
French Revolution promulgated its doctrine of 
liberty, equality, and fraternity ; and prior to that 
there was no claim made to any belief in a uni- 
versal brotherhood of man ; and as far as known, 
no one conceived the idea of an equitable appor- 
tionment of the world's labor pain. But our age 
makes great pretense of equality and of brother- 
hood, and it is high time to substantiate that 
equality and brotherhood by an equitable and 
brotherlike apportionment to all men of this 
world's labor pain, so that no one shall carry a 
double or a four-fold share, while others escape 
the carrying of any, or merely carry a spurious, 
a make-believe load. 

Political democracy, approximate political 
equality of men, has been achieved since Adam 



AND UNSKILLED LABOR. 97 

Smith's time; but political equality proves a bar- 
ren husk if it does not lead to industrial equal- 
ity and social democracy ; and this again is mean- 
ingless unless it means an equitable distribution 
to all, of the labor pain and sacrifice imposed 
by nature herself upon all life, including man- 
kind. In other words, everyone should carry his 
proper share, and, generally speaking, that means 
an equal share of the world's labor pain. This, 
and nothing short of this, constitutes industrial 
democracy, industrial equality, and industrial 
justice. And this can be effected only in one 
way; not by compelling everyone to work a cer- 
tain number of hours every day, no, but by put- 
ting an equal value estimate upon the labor pain, 
hour for hour, of every man who performs useful 
zvork of standard eMciency in any calling what- 
ever, skilled or unskilled. Nothing less than 
this constitutes genuine democracy, nothing less 
than this constitutes true equality, nothing but 
this can put real meaning and sense into the 
words human brotherhood. 

It is to be hoped that men in the foremost 
countries of civilization have now so developed 
a sense for equal rights and for brotherhood, 
and that they have overcome the universally in- 
herited selfish instincts in sufficient measure to be 
willing to accord to others a value estimate and 
consideration for their labor pain, equal to that 
which they put upon their own ; and that there- 
fore, in our day, to get a hearing for such a 
gospel of brotherly justice is not utterly beyond 
hope. I do believe that today men may be able 
to concede that the pain in Smith's back and 



q8 equal value of SKILLED 

muscles is entitled to the same consideration as 
is the pain in Jones' back and muscles; that the 
labor pain endured by Jim, and Tom, and Smith 
are all entitled to the same consideration and 
valuation, though Jim wields pick and shovel, 
Tom wields hammer and saw, and Smith uses 
pen or pencil. If Jim, the laborer, digs a trench 
in which Jones, the plumber, is to lay a pipe, Jim 
will endure greater labor pain and have sorer 
back and muscles after eight hours of steady 
work, and be far more exhausted and fagged 
out, than Jones will be after laying pipe the 
same length of time. And without the trench 
being dug, Jones could not lay in it any pipe; if 
he could not have gotten someone to dig the 
trench for him, he would have had to do it him- 
self, and he would have had to endure that 
greater labor pain which now he shifts onto Jim. 

Let us recall what Adam Smith and his fol- 
lowers said: Labor, the toil and trouble of pro- 
ducing, is the original purchase price that was 
paid for all things; and equal quantities of labor 
may be said to be of equal value to the laborer, 
since he must lay down equal sacrifices of ease, 
liberty, and comfort. The value of any product 
or of any industrial service rendered should be 
estimated according to the duration and intensity 
of the labor pain endured in producing such 
article or rendering such service. 

And we, the privileged gentry of the skilled 
crafts and the so-called genteel occupations, let 
us, I say, fully realize, and keep vividly in mind, 
that the greater labor pain, the greater burden 
of irksomeness and fatigue, usually endured by 



AND UNSKILLED LABOR. 99 

the unskilled laborers, is by them lifted from 
our shoulders; that we ourselves should have to 
do this work and endure this greater hardship 
ourselves, if it were not borne by those others. 
And let us further remember that this rougher 
work of unskilled and half-skilled labor, the 
hewing of wood and carrying of water, the 
sweeping, cleaning, and digging; the plowing 
and reaping; that all this rough work is, gen- 
erally speaking, indispensable and necessary, 
while much of the finer work is rather unes- 
sential. Let us then hasten to accord to these 
workers equal value and equal pay, and con- 
sider ourselves fortunate if they do not some day 
turn the tables on us, and by weight of their 
numbers force upon us and our services the in- 
ferior valuation. 

But some readers may still resist this reason- 
ing and cling to the notion that acquired skill 
implies a labor pain of training and a sacrifice 
of time and money, and on that ground entitles 
the possessor of this skill to a correspondingly 
higher compensation. They may not be able to 
get it out of their heads that nimbleness of wit 
and dexterity of hand impart to things cun- 
ningly wrought a superior virtue and value, be- 
cause that opinion has been so long and so uni- 
versally accepted. Nor can they get it into their 
heads that this is not the final and crucial test 
of value, but that the real test of value is this: 
Hozv much toil and trouble, how severe a labor 
pain, and how many hours of same, is involved 
in this thing or that service; how much labor 
pain has the producer put into this ,and does he 



100 EQUAL VALUE OF SKILLED 

save me if I acquire this thing from him by pur- 
chase or exchange; that every fair and equitable 
exchange should be an exchange of equal 
amounts of labor pain or sacrifice. This idea 
it will be as hard to get into the heads as it will 
be to get the other idea out, because it has never 
been clearly and adequately presented, at least 
not as far as general knowledge is aware. 

However, let us briefly examine the claims 
advanced on behalf of skilled labor as against 
unskilled, both as to historical origin, and as to 
present justification. And the first question I 
would ask is whence comes this unskilled labor? 
Undeniably a large part is engendered in the 
cities, both large and small. Boys and young 
men coming from illy regulated homes, or from 
homes oppressed by poverty, where the boys at 
an early age are sent out as bootblacks, news or 
errand bo3^s, or in similar ways to help earn the 
family subsistence; and these boys neither have 
the chance for a full school education, nor the 
chance to learn a skilled trade. Let us grant 
that some are born with a roving, shiftless dis- 
position, and some perhaps with a low grade of 
mentality. And incidentally, dear reader, let me 
remind you that to be so born is not the deliber- 
ate choice of these individuals but their misfor- 
tune, an accident of birth. But the most prolific 
source of unskilled labor is the surplus country 
population, which is ever drifting to the cities. 
These people mainly make up the great army of 
pick and shovel men, employed in street and 
sewer construction work, in excavations, and as 
yard laborers and helpers in large industrial 



AND UNSKILI.ED I,ABOR. loi 

plants, freight handlers, teamsters and stable- 
men, etc. And ruling custom assigns to this 
class of labor a wage similar to that paid for 
labor help on the farm. While many of these 
laborers are recent immigrants, such are like- 
wise for the greater part excess country people, 
and they bring with them an exceedingly low 
standard of living, habits of submission, and 
acceptance of low living conditions; and the in- 
flux of great numbers of these people constantly 
renews a depressive influence upon the economic 
condition of unskilled labor and farm help, since 
they carry with them their inherited historical 
and economic status. 

Adam Smith in his Wealth of Nations, Book 
I. and Book III., gives an exceedingly interesting 
explanation of how it came that agricultural 
labor in Europe was far more illy paid than the 
mechanics and artisans of the towns. His 
account of the circumstances which brought this 
about is too lengthy to be here reproduced with 
any degree of fullness, and I can only present 
some condensed passages: 

"In the ancient state of Europe the occupiers 
of land were all tenants at will. They were all 
or almost all slaves; but their slavery was of 
a milder kind than that known to the ancient 
Greeks or Romans, or even in our West Jndian 
colonies. They were supposed to belong more 
directly to the land than to their master. They 
could be sold with the land but not separately. 
They could marry, with the consent of the mas- 
ter, but he could not afterwards dissolve the 
marriage by selling the man and wife to differ- 



102 EQUAL VALUE OF SKILLED 

ent persons. If he maimed or murdered any of 
them he was Hable to some penalty, though us- 
ually a small one. They could not acquire prop- 
erty; whatever they acquired was acquired to 
the master, and he could take it away from them 
at pleasure. It was properly speaking the master 
who occupied his own lands and cultivated them 
by his bondsmen. This species of slavery still 
exists (1775) in Russia, Poland, Hungary, Bo- 
hemia, Moravia, and other parts of Germany. 
It is only in the western and southwestern parts 
of Europe that it has gradually been abolished." 
(Book III, chapter 2, p. 344.) 

''The inhabitants of cities and towns were, 
after the fall of the Roman empire, not more 
favored than those of the country. The privi- 
leges which we find granted by ancient charters 
to the inhabitants of some of the principal towns 
in Europe sufficiently show what their condition 
must have been before these grants. People to 
whom is granted a privilege that they might give 
their own daughters in marriage without the 
consent of their lord; that upon their death their 
own children and not the lord should succeed to 
their goods, and that they might dispose of their 
effects by will, must before these grants have 
been nearly in the same state of villainage with 
the occupiers of the land in the country. But 
how servile soever may have been originally the 
condition of the inhabitants of towns, it appears 
evidently that they arrived at liberty and inde- 
pendency much earlier than the occupiers of 
land in the country." (Book III, chapter 3, pp. 
352-3.) 



AND UNSKILLED LABOR. 103 

Adam Smith explains this at considerable 
length by the strife between the barons, or lords, 
and their kings, in which the kings usually 
sought the help of the towns, granting them 
many privileges, among which were the rights to 
fortify the towns, keep armed forces, have their 
own magistrates and ordinances, and to incor- 
porate their trades in guilds. The towns thus 
became powerful as well as rich, could defy the 
barons and give protection against these to their 
citizens. And in Book I, chapter 10, he tells 
how the inhabitants of the towns made use of 
their better political and social position to take 
advantage of the tiller of the soil and to oppress 
him pecuniarily in their business dealings with 
him; that is, they over-reached him in the ex- 
change of products, which as we now under- 
stand is really an exchange of labor. 

"The policy of Europe occasions a very im- 
portant inequality in the advantages of different 
employments by restraining competition in some 
employments to a smaller number than other- 
wise might enter them. The exclusive privileges 
of incorporated guilds are the principal means 
for this purpose. The exclusive privilege of an 
incorporated trade necessarily restricts the com- 
petition in the town where it is established to 
those who are free of the trade. * To have 
served an apprenticeship in the town under a 
master properly qualified, is commonly the requi- 
site for obtaining this freedom. The by-laws 
of the corporation regulate sometimes the num- 

* Free of the trade means free to, or permitted to practice 
that trade or handicraft. 



104 EQUAL VALUE OF SKILLED 

ber of apprentices which any master is allowed 
to have, and almost always the number of years 
which the apprentice must serve. The intention 
of both regulations is to reduce the number of 
competitors in such trade. In Sheffield no master 
cutler can have more than one apprentice at a 
time, by a by-law of the corporation. In Nor- 
folk and Norwich no master weaver can have 
more than two apprentices under pain of forfeit- 
ing live pounds a month to the king." (Wealth 
of Nations, Book I, chapter 10, p. 107.) 

Smith cites similar corporation by-laws for 
hatters and for silk-weavers, some of which he 
says were confirmed by public law of the king- 
dom, and binding anywhere in England and Eng- 
lish plantations. 

"By the 5th of Elizabeth, commonly called the 
Statute of Apprenticeship, it was enacted that 
no person should for the future exercise any 
trade, craft, or mystery, at that time exercised 
in England, unless he had previously served to 
it an apprenticeship of seven years at least; and 
what before had been the by-law of many cor- 
porations became in England the general and 
public law of all trades in market towns." (p. 
108.) 

Smith says that seven years seems to have 
been all over Europe the usual term of appren- 
ticeship in the greater part of incorporated 
trades; and he severely condemns such long 
apprenticeships, as both unnecessary for acquir- 
ing a reasonable knowledge of any trade, and as 
injurious to the character and habits of the 
apprentice, since he generally served without any 



AND UNSKILI.ED I,ABOR. 105 

other pay than merely his keep in board, lodg- 
ing and clothes ; and thus he had no incentive to 
spur him on in his work, but on the contrary fell 
into a spirit of sullen resentment toward the 
master, and gave him in return the smallest ser- 
vice he could get by with. Smith contends that 
the whole purpose, and the actual result of these 
regulations, was to restrict competition between 
the followers of each craft, and thus artificially 
cause a scarcity value of their products, and 
enable them to exact prices for their goods far 
above what free competition would have allowed. 
The burden of these excess prices fell upon the 
people of the country-side, the occupiers and 
tillers of the land, who had no opportunity for 
off-setting these maneuvers by united action and 
corporations of their own. And thus were estab- 
lished customary rates of pay for labor on land, 
of half, or less than half, the rate of pay for 
mechanics and artisans of the towns. 

"The government of towns was altogether in 
the hands of traders and artificers, and it was 
the manifest interest of every particular class of 
them to prevent the market from being over- 
stocked with their own particular goods. Each 
class was eager to establish regulations for this 
purpose, and if it was allowed to do so, was will- 
ing that other classes should do the same. In 
consequence of such regulation each class was 
obliged to buy needed goods from other classes 
at a somewhat higher price than they otherwise 
might have done, but was enabled to sell their 
own products at a similarly enhanced price; so 
that so far it was as broad as -it was long. But 



io6 EQUAL VALUE OF SKILLED 

in their dealings with the country people they 
were all great gainers; and in these latter deal- 
ings consists the trade which supports and en- 
riches every town." (Book I, chapter 10, p. 112.) 

"Every town draws its whole subsistence and 
all the materials of its industry from the coun- 
try. It pays for these chiefly in two ways: first 
by sending back to the country part of those 
materials wrought up and manufactured; sec- 
ondly by sending to it both crude and manufac- 
tured produce from other countries, or from 
distant parts of the same country. The wages 
of the workmen, and the profits of their differ- 
ent employers, make up the whole of what is 
gained upon both. Whatever regulations there- 
fore tend to increase those wages and profits 
beyond what otherwise they would be, enables 
the town to purchase with a smaller quantity of 
its labor, the produce of a greater quantity of 
country labor. They give the traders and arti- 
ficers in the town an advantage over the land- 
lords, farmers, and laborers in the country; and 
break down that natural equality which would 
otherwise obtain in the commerce between them. 
The whole annual produce of the labor of so- 
ciety is annually divided between these two sets 
of people [city and country]. By means of those 
regulations, above described, a greater share is 
given to the inhabitants of the towns than would 
otherwise fall to them, and a lesser to those of 
the country, (p. 113.) 

"The industry of the town, by these means, 
becomes more advantageous, and that of the 
country less so. That the industry in towns is 



AND UNSKILLED LABOR. 107 

everywhere in Europe more advantageous than 
that which is carried on in the country we may 
satisfy ourselves by one very simple and obvious 
observation. In every country of Europe we find 
at least a hundred people who have acquired 
great fortunes from small beginnings by trade 
or manufacture, for one who has done so by 
activity that properly belongs to the country, by 
the cultivation of land. The inhabitants of a 
town, being collected in one place can easily com- 
bine together. The most insignificant trades 
carried on in towns have been incorporated. The 
inhabitants of the country live dispersed and 
cannot easily combine. They have never been 
incorporated, and the incorporation spirit has 
never prevailed among them. No apprentice- 
ship has ever been thought necessary to qualify 
for husbandry, the great trade of the country." 
(p. 114.) Smith contends that it requires more 
sense and sound judgment to be a successful 
husbandman, than is required in most trades. 

'The common ploughman, though generally 
regarded as a pattern of stupidity and ignorance, 
is seldom defective in his judgment and discre- 
tion. In China and Indostan both the rank and 
the wages of the country laborers are said to be 
superior to those of the greater part of artificers 
and manufacturers. They would probably be so 
everywhere, if corporation laws and corporation 
spirit did not prevent." (p. 115.) 

"Townspeople of the same trade seldom meet 
together for merriment or diversion but the con- 
versation ends in a conspiracy against the public 



io8 EQUAL VALUE OF SKILLED 

or in some contrivance to raise prices/' (p. 117.)* 
This is Adam Smith's explanation of how arose 
the custom of paying country labor, from which 
so largely the unskilled labor of the cities is re- 
cruited, a much smaller wage than is paid me- 
chanics, artificers, and traders. Smith says in 
effect that country labor was the last to emerge 
from actual bondage; that the wages of me- 
chanics and craftsmen were artificially raised as 
the result of rules and regulations instituted by 
incorporated guilds, which raised the price of 
their products above the level that free compe- 
tition would have established, and which enabled 
the masters to pay their journeymen help much 
higher wages than labor on the farm was able to 
command. In other words, it was effected 
through such "trusts" and combinations in re- 
straint of trade, as in modern times have been 
condemned and outlawed, and by methods which 
we of today characterize as criminal, as fraud 
and imposition; methods which in the exchange 
of products circumvent and defeat that exchange 
of labor for equal labor which is the economic 
ideal of fairness and justice, and which prac- 
tically all economists proclaim as such. 

Now while Adam Smith's explanation may 
not cover the entire case, and while he may have 
overlooked some things and over-estimated 
others, yet he was beyond doubt the most clear- 



* My copy of Adam Smith is a 1914 Everyman's Library 
edition, and the page numbers given may not correspond 
with those of other editions of the Wealth of Nations; but 
it should not be difficult to locate the cited passages by book 
and chapter stated. The passages given are not full quota- 
tions but are much abbreviated. 



AND UNSKILLED LABOR. 109 

sighted of all economists, and the most eminent. 
He was a man of rare learning and insight, a 
traveler and a student, and of unassailable char- 
acter. He spent ten years writing his great book 
"An Inquiry into the Wealth of Nations,'' and 
in doing $0 delved deep into historical records, 
examining many original documents, and was 
thus able to embody much valuable information 
in his book. This man's words are entitled to 
a most respectful hearing, and his opinion should 
carry great weight generally, as also on the points 
discussed above, explaining the causes which es- 
tablished the discriminating low rate of pay for 
country labor, and hence for the unskilled labor 
of cities, largely recruited from the country. 

But, as remarked above, Adam Smith's ex- 
planation may not cover the whole case; there 
may be additional causes which contribute to the 
same effect, some of which may have come into 
play since Smith wrote. Let us see what fur- 
ther can be brought forward as accounting for 
the low estimate put upon unskilled labor and 
its principal recruiting source, farm labor. That 
the peasant labor of Europe emerged from bond- 
ap-e and serfdom long after the mechanics and 
artificers of the cities were free, is a well known 
historical fact. The catching of and trading in 
negro slaves began, as far as modern Europe is 
concerned, in 1442, and was not outlawed till 
about the close of the 18th century. The serf- 
dom of peasants was not abolished in Prussia 
till 1810 and in Russia in 1861. Peonage ceased 
in Brazil in 1885; and actual negro slavery con- 
tinued in English colonies until 1833 and in the 



no EQUAL VALUE OF SKILLED 

United States till terminated by the civil war, 
1863. All this time the mechanics of the cities 
had been free of bondage for hundreds of years ; 
and note that in all the above cases it was the 
peasant, country labor, that had been freed at 
such a late day, and that the black slaves of 
English colonies, and in the United States, were 
practically all either domestic servants or plan- 
tation laborers, agricultural labor. The slaves 
of our Southern States worked in the corn and 
cotton fields, on sugar and tobacco plantations. 
When this labor was changed from slave to 
wages labor, it naturally followed that it was 
paid a mere subsistence wage, a wage commen- 
surate for a serf; and these people, rejoicing in 
their new-found freedom, were content with this 
wage, and thus it must have had a very depress- 
ing effect on the compensation of all country 
labor, and on the prices commanded by the prod- 
ucts thereof. This accords with, and reenforces 
the reasoning of Adam Smith, and shows that 
the low valuation of farm labor is largely an 
after-effect of ancient and medieval slavery. 

But there are still other causes which con- 
tribute to the same effect. One of these causes, 
it seems to me, has been overlooked by all writers 
on economics that have come to my notice. That 
cause lies in the fact that in the very nature of 
things there must be a continual decrease in the 
required amount of farm labor as compared with 
industrial and commercial labor, in every country 
of advancing civilization. The farmer produces 
principally the necessaries of food. This is a 
quantity, the demand for which is limited by the 



AND UNSKILLED LABOR. in 

number of mouths to be fed; even a millionaire 
can eat only a certain amount of bread, meat, 
and potatoes. The demand for food is distinctly 
limited ; but not so the demand for improved wear 
and housing, for increased conveniences and 
comforts, which are the products of industrial 
labor. For these products there is no definite 
limit, the only limit being the purchasing ability 
of the people and their desire, and this increases 
with every advance in civilization. And even 
the amount of farm labor, required for a given 
amount of farm produce, is constantly declining, 
owing to the increased use of farm machinery, 
and the substitution of steam, electricity, and 
gasoline for horse and man power, not only for 
transportation and haulage, but also on field 
and farm itself. While this machinery displaces 
farm labor, the making of same requires addi- 
tional industrial labor. In consequence of this 
inevitable accompaniment of an advancing civil- 
ization, farm labor is continually in excess of the 
demand, and its market price is correspondingly 
depressed; and, drifting into the cities as un- 
skilled labor, it depresses the wage rate there for 
that class of labor. In other words, unskilled 
laborers are the victims of the irrational condi- 
tions resulting from permitting unregulated 
supply and demand to rule in these matters. 

Adam Smith /'contends that the agricultural 
laborer, the common ploughman he says, has 
more sense and discretion than the town me- 
chanic, and possesses superior intelligence; and 
that the husbandman requires in his work more 
knowledge and experience than is required in 



112 EQUAL VALUE OF SKILLED 

the greater part of mechanic trades. I do not sub- 
scribe to this opinion, at least not for our time 
and especially for European countries; and I 
prefer to argue the case for unskilled, and for 
farm labor, rather on the opposite presumption, 
that the farm laborer, and the unskilled laborer, 
on the average, is less intelligent and less alert 
than the city bred mechanic and artisan; and 
that less skill and intelligence is required in his 
work. I have on a previous page admitted this 
in regard to valuation, and I have offset that les- 
ser skill with the greater irksomeness and labor 
pain generally endured by the unskilled laborer. 
Let us admit, for the sake of argument, that this 
unskilled laborer, whether city bred or from the 
country, is dull and stupid and ignorant. Would 
you punish him for that? Is it really his fault 
in the sense of his being blamable for it? It 
would be as reasonable to blame the blind or the 
deaf for being so born, and to punish them for 
their misfortune. The man who is dull and 
stupid is not so because it is his deliberate choice 
to be so ; not at all. It is the unpropitious accident 
of birth ; he is the victim of a low grade heredity. 
This is his misfortune, not his choice. If he is 
ignorant, that also is his misfortune. Either he 
had no chance for schooling, for acquiring edu- 
cation, or learning a trade and becoming a skilled 
worker, or else he was born without capacity and 
disposition for such things; and this again is a 
matter of heredity and accident of birth. To be 
born in a country or in a district that makes no 
provision for schools, and does not impose 
schooling upon the children, but lets them grow 



AND UNSKII,I,ED I^ABOR. 113 

up illiterates, is not the victim's choice, but his 
misfortune; a misfortune which befalls 85 per 
cent of the Russian peasants, as well as a large 
per cent, of people in southern Europe, and quite 
a number ot the colored population of our own 
Southern States as well as many poor whites in 
the hill districts. Add to this the evil of child 
labor, which is rampant in this country as well 
as abroad, and which foredooms many children 
to comparative ignorance of letters, as well as 
to work in so-called unskilled pursuits. Thus it 
is that by misfortune of ill birth, or by the mis- 
fortune of ill circumstance of environment and 
condition during childhood, these unskilled 
workers have become for you hewers of wood 
and drawers of water; and would you now add 
injury to their misfortune by putting upon their 
labor pain a value estimate of one-half or one- 
fourth the value you put upon your own labor 
pain?^ For shame man, you who thinkest so, go 
and hide yourself, and talk you not of social jus- 
tice or of human brotherhood. 

Know you not that the real and final value 
determinant of anything is the amount of labor 
burden, labor pain, endured in producing such 
thing; and that when you acquire any such 
thing by exchange or by purchase, which is but 
another name for exchange, then you are saved 
the labor pain necessary for producing this thing, 
since the producer thereof has endured that labor 
pain for you; and there is not, and cannot be, 
any fair and just price in exchange, other than 
an equal amount of labor pain, embodied in some 
other article, or endured in rendering some ser- 



114 EQUAL VALUE OF LABOR. 

vice in exchange, as the uhimate purchase price 
for such thing? This has already been stated 
several times, but it cannot be repeated too often, 
because this is the basis of the entire economic 
philosophy and the value theory presented in this 
book. I see and I know many men, utterly 
stupid and ignorant, and, what is worse, vile in 
character, debased, vicious, repulsive ; with whom 
I would not associate nor have any companion- 
ship, who could under no circumstances be my 
friends nor I theirs ; yet when such a one performs 
a day's labor of standard efficiency, then, I say, 
he is entitled to the same reward, and his labor 
pain to the same consideration, as my day of 
labor pain and labor of standard efficiency, re- 
gardless of his looks, his name, or his moral char- 
acter. In the value estimate of labor pain all 
should stand upon a level of perfect equality. 



Chapter VIL 

No Labor Without Some Skill. Present 
Tendency Toward Equal Compensation. 

But many people will still be unable to accept 
as sound and logical this reasoning which em- 
phasizes labor pain as the real value determinant ; 
They will not be able to discard the notion that 
skill and training of the laborer imparts a supe- 
rior value to his product, and that this in turn 
reflects a corresponding value on the labor or 
service involved ; and that therefore this skill and 
capacity is the deciding factor in value determi- 
nations. Do not overlook the fact that I have 
assumed utility as an essential element of value, 
and that I also have insisted on capacity and 
efficiency when I specified "useful labor of 
standard efficiency." Now |.standard efficiency 
does not necessarily and exclusively mean deft- 
ness of hand and a trained eye ; it may also mean 
trained strength and endurance. In this sense 
there is really no unskilled labor; for even the 
roughest and least dextrous requires some de- 
gree of practice and training to acquire pro- 
ficiency and endurance. There is a certain kind 
of skill required in wielding a pick or shovel 
effectively, and considerable in wielding a sledge 
hammer or an axe or a woodsaw. So there is in 
shoving lumber or handling brick or freight and 
live stock; as certainly it requires skill to drive 
teams, especially on the crowded streets of large 
cities. In all similar work a certain measure of 

"S 



ii6 TENDENCY TOWARD EQUAUTV- 

skill and experience is acquired by the doing 
thereof, so much so that here a period of appren- 
ticeship may be in order just as well as in the 
trades; and certainly it requires an apprentice- 
ship to become proficient at farm labor, plowing, 
seeding, harvesting, milking, tending stock, and 
various other jobs, many of which in these latter 
days involve the use of machinery. 

Let us next assume, for the sake of argument, 
that this unskilled labor is poorly paid because 
the supply thereof exceeds the demand, and 
therefore commands a low price or rate of wages ; 
and that therefore, according to accepted 
political economy, a reduction of this supply 
of unskilled labor below the demand for 
same, might raise the price or wages thereof, 
even above the rate paid for skilled labor. Now 
all general educational institutions of these latter 
days, beginning with the public schools and on 
through the whole list of auxiliary schools, voca- 
tional, night schools, business colleges, and cor- 
respondence schools, not only raise the general 
level of intelligence, but continually push boys 
and young men into the so-called skilled pur- 
suits, and tend to deplete the supply of unskilled 
labor. Generally speaking, common laborers, 
insofar as they are sensible and given to sobriety, 
will strive to give their children a better start in 
life than fell to their own lot; give them as much 
education as they can afford, and at least cause 
them to learn a trade. Even widows will skimp 
and deny themselves, to enable their children to 
attain a station in life, which, conforming to 
ruling notions, is better than that of a mere un- 



NO LABOR WITHOUT SKILL. 117 

skilled laborer. The increasing general intelli- 
gence also improves the heredity and early en- 
vironment of the coming generations, so that, 
aside from actual defectives, practically all pos- 
sess capacity for some form of skilled jabor. 
These influences, gathering cumulative strength, 
will in a few generations reduce the supply of 
unskilled labor to a great scarcity, and by virtue 
of competitive effect bring about that equality of 
pay for skilled and unskilled labor, at which the 
skilled mechanic now is inclined to rage like a 
mad bull at a red rag. Why not instead of 
opposing the inevitable, accept it gracefully, and 
meet it in a sane and brotherly spirit? Why 
not accept this equality of compensation as emi- 
nently just and proper, and as the only thing 
that can establish peace on earth and good will 
among men ? 

It is true, the foremost nations, while they 
found schools, spread education, and establish 
some measure of democracy, which inevitably 
must lead to a scarcity ',of unskilled labor as 
shown above, have at the same time pursued a 
policy of increasing that supply by opening their 
gates for the influx of cheap labor, even to the 
extent of importing captive negroes and main- 
taining chattel slavery. In this wise the fathers 
have left behind them in this country the ominous 
curse of a race question. And there are men in 
this country today, so fatuous as to advocate the 
mass-importation of Chinese coolies and other 
alien and unassimilable races in order to provide 
a supply of cheap common labor ; thus proposing 
to add another race question to the one that now 



ii8 TENDENCY TOWARD EQUALITY. 

baffles our wisest minds. Such proposals are 
unblushingly made, by men belonging to the 
dominant class, the so-called employing class, in 
order to secure an abundant supply of cheap 
labor, and thus prevent the rate of wages for 
common labor from rising to a higher level of 
compensation, such as it, and agricultural labor, 
might attain if not thus arbitrarily checkmated. 
It is this *'we,'' this dominant and ruling faction 
in every country, that thinks "it" is the nation; 
that speaks of "our" country, "our" resources, 
"our" soldiers; and who seem to think that for 
their class all things exist, and in their interest 
all things are to be managed; foreign markets 
captured, and colonies acquired, that "we" may 
trade there and get rich; cheap labor secured 
that "we" may compete in the markets of the 
world, and everything done, that "we" may rise 
to dizzy heights of opulence, regardless of what 
happens to those whom they think of as the 
common herd. That also seems to be the chief 
desideratum of the political and economic policies 
of present day statesmanship, and the highest 
wisdom of present day scholars. 

But it is high time to reverse such a policy; 
to cease worshipping these false ideas, and to 
substitute for them ideals of social justice, of 
fair dealing, of making men in fact co-heirs of 
this world and its opportunities for the life 
abundant, by putting an equal value estimate upon 
all men's labor burden, hour for hour, whenever 
the same is useful and of standard efficienc}^ 
Until this is done mankind will be scourged by 



NO LABOR WITHOUT SKILL. ng 

war, by poverty, by crime, and by the blind grop- 
ings for redress of infuriated masses of men. 

I said that even today a distinct tendency to- 
ward equahty of compensation is discernible, at 
least in this country, and probably likewise in 
other leading countries, as this accords with the 
tendency of the times and the rising tide of 
democracy. When the United States mobilized 
its army for participation in the European war, 
the pay of the common soldier was nearly dou- 
bled, while that of the officers was raised but 
slightly over what it was at the time of the 
Spanish American war. The daily papers of 
May 18th, 1917, had this item among others re- 
lating to the new army bill as finally passed: 
"Increasing the pay of all enlisted men as fol- 
lows: Fifteen dollars additional monthly for 
those now receiving less than twenty-one, com- 
prising the bulk of the army; and six dollars 
additional monthly for those receiving forty-five 
or more. This is an increase of 71 per cent on 
the lowest pay and only 13 per cent on the higher 
pay. 

"The directors of the Western Union Tele- 
graph Company at a recent meeting voted to 
give their employes two special payments during 
the year 1917 to meet the high cost of living. 
Employes receiving less than $1200 a year will 
receive an additional 8 per cent of their annual 
wages; those receiving from $1200 to $2000 will 
get a 6 per cent addition, and those receiving 
over $2000 will get 5 per cent." Newspaper 
item, July 6, 1917. 

"The teachers in the grades of Milwaukee 



120 TENDENCY TOWARD EQUALITY. 

public schools went on record in favor of a liv- 
ing wage at a regular meeting Wednesday of 
the Teachers' Association, recommending a 
bonus of $120 a year for those receiving $50 per 
month; $60 for those receiving $55 per month; 
and $45 for those receiving from $60 to $90 per 
month/' Milwaukee paper, October 11, 1917. 

"The Trustees of Purdue University (Lafay- 
ette, Indiana) have announced that the pro- 
fessors and instructors are to receive an increase 
of salary averaging 10 per cent on a sliding 
scale, the ones drawing the lower salaries getting 
the larger increase." Newspaper item, Septem- 
ber 24, 1917. 

^'Representative Keating asks Congress to in- 
crease the wages of all federal employes; the 
increase to range from $300 for those receiving 
less than $1200, to $60 for those receiving be- 
tween $1800 and $2000 a year. For $2 a day 
workers an increase of $1 per day is asked; for 
those receiving $2.50 an increase of 80 cents is 
asked, for $3 men 60 cents, and for $4 men an 
increase of 20 cents per day." News item, De- 
cember 28, 1917. This I understand is a propo- 
sition emanating from Samuel Gompers of the 
American Federation of Labor. 

The daily papers of January 1, 1918, reported 
Governor Whitman of New York as having 
made the following statement: "I have allowed 
increases for practically all those in labor, me- 
chanical and low paid clerical and technical ser- 
vice, where requested by department heads; but 
I have disallowed all requested increases for em- 
ployees now receiving $3000 a year or more." 



NO LABOR WITHOUT SKILL. 121 

The above six items are indications showing 
that the world is groping its way toward equal 
compensation for all useful labor of standard 
efficiency. 

Uplifters have for a number of years been ad- 
vocating a minimum wage, especially so for 
women. I have before me a newspaper clipping 
dated August 17, 1917, and credited to the New 
York Survey. It says, "The Supreme Court 
gave a decision on April 9th, upholding as con- 
stitutional the Oregon minimum wage law. This 
has given impetus to the enforcement of State 
minimum wage legislation that has been await- 
ing federal judgment. The Arkansas Supreme 
Court has upheld the Arkansas minimum wage 
law providing a flat rate of recompense for in- 
experienced women of not less than one dollar a 
day of nine hours. More recently the State In- 
dustrial Welfare Commission of California has 
announced a revised wages schedule for women 
employed in mercantile establishments. It pro- 
vides a rate of not less than $10 per week or 
$43.33 a month for experienced women; and $6 
per week for girl learners under 18 years, and 
$8 per week for those between 18 and 20 years, 
and for both an increase of SO cents per week 
every six months until the standard rate of $10 
per week has been reached. The hours are lim- 
ited to eight per day and not to exceed forty- 
cieht a week.'' 

Men are discussing a minimum wage now; I 
venture to say that soon they will discuss a 
maximum wage. And why not a maximum 
wage ? That is what the discussion of a minimum 



122 TENDENCY TOWARD EQUALITY. 

wage naturally will suggest. And what can that 
maximum be? Only one kind of natural maxi- 
mum wage is possible or thinkable, and that is 
a wage which is equal for all whose work is of 
standard efficiency. From this conclusion there 
is no escape, it is certain fate, manifest destiny. 
Much has of late been written about the high 
cost of living, and most of it has been silly stuff, 
evidencing the dense ignorance of the writers. 
The blame for this high cost has been laid on 
the railroads, on poor wagon roads, on faulty 
marketing, on poor farming and wastage on the 
farm, on the middlemen, commission men and 
retailers, on speculators, on bankers, on Wall 
Street, and on the produce exchange, on the 
money system and even on an excessive gold 
supply. This is all phantom chasing. The plain 
and simple truth is that the farmer is beginning 
to come into his own, is beginning to demand a 
fair compensation for his work, and his help is 
demanding a fair wage; encouraged to do so b}'^ 
the comparative scarcity of farm labor, which is 
beginning to make itself felt, and which is caused 
bv the drift of farm laborers to the better paid 
employments in the cities. Farmers are begin- 
ning to look upon themselves as being just as 
good as other men, and entitled, equally with 
other people, to the comforts and decencies of 
civilized life, and they are demanding and getting 
better prices for their products than ever before 
was the case; hence cost of living has gone up 
for city people, and we may rest assured it will 
never come down to what formerly it was. The 
work of the farmer and his help will have to be 



NO LABOR WITHOUT SKILL. 123 

paid at approximately the same rate as the work 
of mechanics in the cities, or the farmers' sons 
and daughters and hired men will continue to 
drift to the cities as they have been doing, until 
an equilibrium is established and until farm 
laborers, because of increasing scarcity, rank as 
high in pay as city mechanics. This is the ten- 
dency toward equal compensation; and as this 
influence raises the pay and the value estimate 
put upon farm labor, so will the latter, because 
of its correlation, help to raise the pay and the 
value estimate put upon unskilled labor in the 
cities toward that common level of equality for 
all useful work of standard efficiency which is 
the gospel and the prediction of this my book. 

I fear that this long argument has wearied 
some readers. But it has been necessary in order 
to convince men of the reasonableness and the 
justice of estimating all labor pain alike, in who- 
soever's back and muscles it is felt ; and of putting 
the same value estimate on all kinds of useful 
labor of standard efficiency, hour for hour. For 
upon this my entire economic philosophy and the 
validity of my value theory depend. Once this 
principle of equal value and equal compensation 
for every standard efficiency labor hour is 
accepted, then the theory follows as a matter of 
self-evident logic, that the value of any article 
of exchange, any commodity, depends upon how 
niany hours of standard labor is embodied 
therein. But it will probably be necessary to re- 
peat these arguments over and over again, be- 
fore the dormant sensibilities of any great num- 
ber of this poor humanity is awakened. I shall, 



124 TENDENCY TOWARD EQUALITY. 

however, now end this part of the discussion 
with a few brief statements. 

Many years ago I heard a speaker recite these 
Hnes, which at the time were new to me: 
"Till the war drums throbb'd no longer and the 
battle flags were furl'd 
In the Parliament of man, the Federation of the 
world." 

These lines have been ringing in my ears ever 
since with a strange significance. While Tenny- 
son had in mind a parliament of nations, to settle 
political and internatonal disputes, I at once 
applied these lines to the industrial warfare and 
disputes within nations. What do you suppose, 
dear reader, such a parliament of man within a 
nation, representative of all the various workers 
in that nation, would decree, in order to establish 
general industrial justice and fair dealing for all, 
especially in regard to the distribution of the na- 
tion's annual wealth production; which is but 
another name for fixing the compensation for 
all kinds of labor, and putting an estimate on 
every man's labor pain? What would they de- 
cide? What else could such a parliament of man 
decree in this matter, than equal compensation 
for all kinds of useful work of standard efficiency? 
No other decision is thinkable. 

I am addressing my plea to all men possessing 
mind and heart: to scholars, thinkers, and espe- 
cially to economists. I am also addressing my 
words to the social bottom strata, the so-called 
unskilled laborers, the victims of the world's un- 
just value estimates; that these men may be en- 



NO LABOR WITHOUT SKILL. 125 

couraged to demand fair play. But above all I 
address my words to skilled labor, particularly 
the crafts and trades organized into unions and 
federations, the aristocracy of labor; and I ask 
you, union men, once more : do you want to con- 
tinue the universal feud, the endless dispute and 
contention about wages, the industrial war, the 
perpetual antagonism and clash of interests? 
Shall each organized craft strive against all 
other crafts and the rest of the nation for more 
pay, for advantage at the expense of all the rest 
of their fellow-citizens ? Do you insist upon con- 
tinuing under a so-called law of supply and de- 
mand, which in fact is but a disguised law of the 
jungle, a law of tooth and claw, a law of over- 
reaching and besting your weaker or unwary 
fellowman, or taking advantage of his weakness 
or his need and distress, to compel him to give 
you two, three, or four hours of his work for 
one hour of yours? Or do you want industrial 
peace; do you want to settle once and for all, 
what is a fair and just wage for every man and 
woman, by accepting this principle, that every 
man's labor pain is entitled to the same consid- 
eration; that all useful labor of standard efifi- 
ciency is entitled to the same value estimate, and 
is of equal value? Are you ready to rise to that 
exalted moral attitude, of being willing to pay 
with an hour's service of yours every man who 
renders you an hour's service? Are you ready 
to pav with an hour of vour labor for every hour 
of labor embodied in the article you purchase? 
Accepting this you accept that righteousness of 



126 TENDENCY TOWARD EQUALITY. 

heaven, which having found, all things else have 
been promised unto you. O that my book may 
not be like a voice whose sound is lost in the 
wilderness and reaches no human ear. 



Chapter VIII. 

Ultimacy in Value and Summary of Value 

Theory. 

Assuming that the reader has accepted this 
fundamental principle of equal value, hour for 
hour, for all kinds of useful work of standard 
efficiency, we see that all the difficulty of de- 
termining values has vanished. The perplexing 
value problem is solved; and it becomes a mere 
question of arithmetic, of adding up the sum of 
hours or minutes of standard labor embodied in 
any article of material wealth, from the first raw 
material, through all the various processes of 
manufacture, including transportation and hand- 
ling in distribution, until it reaches the ultimate 
consumer. This theoretically solves the problem 
of determining the value of any article of eco- 
nomic exchange. In practice it may be expedient 
to add a certain per cent above this to the selling 
price, to take the place of various forms of taxa- 
tion for raising the funds necessary to pay the 
salaries and other expenses of education, ad- 
ministration, the judiciary, and for health, police, 
and fire protection; as well as for replacement 
and addition to the machinery of production and 
transportation. I defer consideration of this 
detail to be taken up in Part III. 

I shall now discuss what some economists have 

called ultimacy in value; and perhaps sortie 

readers have already felt this to be missing in 

my discussion, 

127 



128 ULTIMACY IN VALUE. 

Granting that the amount of standard labor 
time embodied in any article measures, or de- 
termines, the value of that article, it may be 
asked, what is the value of the labor hour; how 
is that value to be expressed in concrete and 
definite terms, expressed in terms of the money 
standard? What, in such terms, is the value of 
one hour's labor; how is the value of one hour's 
standard labor to be measured ? Where is the 
ultimate in value expression to be found? 

This I have not yet answered; so far I have 
dealt only in comparisons, compared the value 
of one hour's labor in one field with one hour's 
labor in another field of work, and I have con- 
tended for equality of value without giving 
these hours of labor a quantitative expression, 
aside from their time value. In other words, 
this value theory has not yet passed beyond the 
stage of being a mere ratio of indefinite quan- 
tities ; ultimacy is still wanting, still to be found. 
The ultimate of value expression, the value of 
an hour's standard labor is simply to be arbi- 
trarily designated by proper authority and given 
a name, either as an hour ticket or check, or as 
some convenient and appropriate sum of money, 
current in whatever country accepts this eco- 
nomic philosophy and value theory. 

This answer will probably be rejected by 
many; they will not be able to understand it be- 
cause of its very simplicity; it will bafHe them 
at first thought. To assist the reader in grasp- 
ing this idea, let us consider the somewhat paral- 
lel case of establishing standard measures of 
length by arbitrary decree. Even a primitive 



SUMMARY OF VALUE THEORY. 129 

civilization needs some standard of weight and 
measures. It is interesting and instructive to 
read the various encyclopedia articles and other 
discussions on this subject, which show that pri- 
marily men used various parts of the human 
body as measures, such as the foot, the forearm 
(cubit), the palm or "hand," the finger or digit; 
and they also used wheat and barley grains, both 
for measures and weights; the names of some 
of these still being in use. These measures as 
also their originals, the human foot and arm, 
were of course very indefinite and varying in 
length, and in course of time, when greater 
definiteness was required, had to be arbitrarily 
defined by legislative authority, in order to bring 
about some degree of uniformity. And thus at 
various times during the middle ages the kings 
or rulers had standards prepared, embodying 
length and weight; bars for length and stones 
or metal pieces for weight ; and efiforts were made 
to enforce conformity thereto. It is said that the 
length of Charlemagne's foot was taken as the 
standard length of a foot, and was acknowledged 
in a large part of Europe as such during the 
Middle Ages, and known in France as "the royal 
foot," until the adoption of the metre unit of 
measure. Similarly the length of Henry the 
First's arm was accepted as the length of a yard 
in England. Besides this, an old English statute 
declares that three barleycorns, good and dry, 
laid end to end, make an inch, twelve inches 
make a foot, and three feet make a yard. 

However, authority in those days was rather 
uncertain, ever in dispute, and in many matters 



130 UI.TIMACY IN VALUE. 

divided. Consequently there was no uniformity 
in these measures as regards various parts of the 
same country, and none at all as between different 
countries; and indeed there is not today, except 
a partial uniformity, where the metrical system 
has been legalized and more or less completely 
adopted in actual practice. Provinces and towns 
formerly exercised in such matters great inde- 
pendence, with the result of causing much con- 
fusion and variation in the magnitude of like 
named measuring units. "It is stated in a Dic- 
tionary of Weights and Measures of 1850, that 
there were at that time known and recorded 5227 
varieties. There were 135 varieties of the foot, 
60 of the inch, 29 of the pint, 53 of the mile, and 
235 of the pound. The range of variation of the 
foot has been from 8| to 23^ inches as measured 
by the present English standard inch.'' (Profes- 
sor Le Conte Stevens in Popular Science Monthly 
for March, 1904.) 

It is not pertinent here to pursue this interesting 
subject further. The point that I want to make 
is this: that there was chaos and confusion in 
length measures and in length designations, as 
there was, and is today, confusion and chaos in 
value measures, value concepts, and value esti- 
mates; that length and weight questions were at 
last settled, and length defined by arbitrarily se- 
lected standards. And that similarly a value unit 
of designation may be arbitrarily selected, which 
once chosen and legalized, will serve all men alike, 
and be the same to all men, just as a foot or an 
inch is the same, and would still have been the 
same to all men within the jurisdiction, no mat- 



SUMMARY OF VALUE THEORY. 131 

ter if they had been chosen ten or fifty per cent 
longer or shorter than was actually the case. 
They would have answered their purpose pre- 
cisely as well as they do now. 

I speak advisedly when I say that standards 
of length were arbitrarily selected. While it is 
true that the French savants tried to derive their 
metre from a fixed physical dimension of the 
earth, a ten millionth part of a meridian quad- 
rant, that is to say, a line on the earth's surface 
from the pole straight down to the equator, the 
selection of a ten millionth part of this was 
strictly arbitrary; they might as well have se- 
lected a nine or a twelve millionth, instead of a 
ten millionth part. And moreover, it is now 
asserted that the French engineers, who spent 
seven years, from 1791 to 1798, measuring the 
distance from Dunkirk in Northern France to 
Barcelona in Spain, and from these nine and a 
half degrees of the quadrant calculated the rest 
of the distance from the equator to the pole, after 
all failed to find the accurate measure of this 
distance. 

According to later calculations of Captain 
Clark, meridians vary in length, and the one at 
Paris, practically identical with the one at Dun- 
kirk, he found to be 472 metres longer than cal- 
culated by the French. But this is of no earthly 
importance, and for all practical purposes the 
French engineers might have saved their seven 
years of labor, and arbitrarily chosen any 
convenient length, called it a metre, and 
prepared their precise standard bars to em- 
body this length, for future reference and for 



132 ULTIMACY IN VALUE. 

copying, after the same had received proper legal 
sanction. Thus we see that in two ways the 
metre is an arbitrary choice of length unit. In 
the first place because it was an arbitrarily chosen 
fraction of a supposed physical dimension of the 
earth; and in the second place because it is a 
practical impossibility to measure with certainty 
and accuracy such a dimension of the earth; and 
as it now appears, the men who attempted to do 
so, failed in their object. ''We have the opinion 
of several of the highest authorities in England 
to the effect that there is no advantage in adopt- 
ing a unit of measure founded in nature over 
one of arbitrary character." H. W. Chrisholm 
in Weights and Measures, page 97. This is un- 
doubtedly true, and if the establishment of the 
metric system by the French had been deferred 
until the present day, the French savants would 
no doubt have chosen 36 English inches, or per- 
haps better still 30 English inches, as their arbi- 
trary unit, and called that length a metre. This 
would have made the French and the English 
system of length measurement more readily com- 
mensurable and convertible. One decimeter 
would then have equaled three inches, one centi- 
metre three-tenths of an inch, one yard would 
have been equal to one and two-tenths of a metre, 
and one metre would equal two and one-half 
feet or 30 inches, instead of 39.37079 inches as 
at present is the case, a very cumbersome frac- 
tion in all work of converting English into French 
measure and vice versa. 

The English standard yard is theoretically 
also an arbitrary selection, though regard was 



SUMMARY OF VA1,UE THEORY. 133 

had to the measures of length at that time com- 
monly in use in England, and which custom had 
already reduced to an approximate uniformity. 
The yards then in use were compared, and the 
average length thus found was adopted as the 
precise length of a yard, and embodied in a care- 
fully prepared standard bar, legalized, placed in 
the custody of the Exchequer Department, and a 
number of exact copies made and sent to various 
places for reference, both in England and in other 
countries. Two of these were in 1855 sent to 
the United States, and have since been in the 
keeping of the Coast Survey Bureau. The 
French established an entirely new system, with 
new names for their units; it was in France a 
time of upheaval and change. No such condi- 
tions prevailed in England, and the English 
merely gave precision to the old measures, re- 
tained the old names, and caused no inconveni- 
ence or hardships. 

Similarly, in deciding on an arbitrary value 
designation of an hour's standard work, and 
finding for this an expression in the current 
money and value medium, regard may be had 
to the prevailing money equivalents of labor in 
various lines of work, the same averaged up, and 
a convenient approximation to that average des- 
ignated as the money value of an hpur's standard 
labor in every line of useful work. In this way 
there will be the least amount of friction and 
difficulty, both in the transition to the new sys- 
tem and in maintaining exchange of products 
with foreign lands. It may even be that the 
labor cost of producing gold, the generally 



134 ULTIMACY IN VALUE. 

accepted money material, will be taken into con- 
sideration in designating the money value of a 
.day's or an hour's work in general. But 1 do 
not consider this important, and I explicitly want 
to keep the money idea out of my value theory, 
as being something distinctly subordinate and 
secondary, a minor detail, easily settled when 
once the main question has been solved, the ques- 
tion of value, its nature, essence, and origin. 

Whatever money designation for the value of 
an hour's standard labor may be chosen, 20 cent, 
25, 30, 40, 50, or 60 cent, it should be some 
amount convenient for computation, and involv- 
ing no fractions ; and this sum, whichever it may 
be, would simply indicate a nominal value, a 
mere money name for the purchasing power of 
the labor hour, since the purchasing power of 
the labor hour in reality would be an hour's labor 
product, irrespective of the nominal amount in 
money. The money equivalent of an hour's 
standard work, or the rate of payment, once 
decided, would remain constant like the length 
of a yard, but the purchasing power of the labor 
hour or of its money compensation, as measured 
in products, would increase with the general 
progress in science, technique, and invention, 
with the increase in general efficiency, and with 
the elimination of waste and of mutually ob- 
structive rivalries. In other words, the purchas- 
ing power of an hour's standard labor, as ex- 
pressed in commodities, will increase as the 
productivity of labor increases. The rewards of 
increased effectiveness, due to new discoveries, 
inventions, and new processes, would not be re- 



SUMMARY OF VALUE THEORY. # 135 

stricted to the particular lines -of industry in 
which these inventions and improvements are 
made, but would automatically spread to all the 
ultimate consumers of the product in question; 
that means, the benefit would spread practically 
to every member of the nation. 

Still more concretely stated, the wages of 
standard labor would remain the same, but the 
selling price, to the ultimate consumer, of every 
commodity and convenience would continually 
grow less, as the world advanced in productive 
power. This would hold true also for the prod- 
ucts of the farm, as agriculture is becoming more 
and more a science; with this proviso, however, 
that there may be occasional upward fluctuations 
of prices for farm products, due to unfavorable 
seasons and consequently diminished crop out- 
put. This might also apply to fishing, and per- 
haps to some other lines of work, in which, due 
to diminishing returns, the price of products 
would automatically go up. And in all such 
cases the loss would not fall only or chiefly upon 
that particular branch of labor, but would be 
automatically distributed over the entire com- 
munity. This is as it should be — mutual insur- 
ance, bearing one another's burden. 

Thus then a solution of the value problem is 
found. The ultimate in value designation is 
arbitrarily selected, like a unit of length, the yard 
or the metre, and assigned for an hour's useful 
labor of standard efficiency; and this labor hour 
becomes the value unit and value measure of 
every article of exchange. If, say, 50 cents were 
chosen as a suitable value expression for one 



136 , ULTIMACY IN VALUE. 

hour's standard work, then any article having^ 
embodied in it, all told, four hours of such work, 
from the first raw material to the last handling 
and passing to the consumer, would be worth 
two dollars, and the selling price to him would 
be two dollars plus a percentage to take the place 
of general taxes. And thus the perplexing value 
problem becomes exceedingly simple, almost too 
simple for belief; providing, dear reader, you 
accept as a fundamental principle the proposition 
of equal compensation for all kinds of useful 
work of standard efficiency. 

I have in my reasoning accepted various fun- 
damental tenets of standard economists, and 
merely carried them to logically final conclusions, 
conclusions for which their times were not ripe, 
and which they perhaps for that reason were 
unable to discern. I have accepted Adam Smith's 
labor cost, and labor pain cost doctrine of value, 
and carried the same unswervingly to a final con- 
clusion, whereas Adam Smith stopped short and 
practically did abandon it. He said that the 
original cost and first price of anything is the toil 
and trouble of producing it, and that its value 
lies in the toil and trouble the possession thereof 
saves us. I have consistently adhered to this 
thought, and insisted that irksomeness, the labor 
pain endured and felt in the back and muscles of 
one man or woman, are entitled to the same con- 
sideration and value estimate as the pain felt in 
another man's back, or muscles, or head. I have 
likewise accepted the doctrine of the utility 
school of economists, accepted utility as an in- 
dispensable condition of value. But I have com- 



SUMMARY OF VALUE THEORY. 137 

bined these two ideas instead of rejecting one 
for the other, since they are so closely related as 
to be almost identical. For what is utility, or in 
what does it consist, but in saving us from labor 
pain, saving the possessor of the useful thing 
from the pain or distress of unsatisfied wants, 
unsupplied need, or from the labor pain he would 
have to endure in providing or producing the 
needed thing by his own labor. This labor pain, 
according to Adam Smith, is the original first 
cost and first price of any produced thing, and 
this price, I insist, is equal hour for hour, and 
passes over into the jthing produced, becomes 
embodied therein and constitutes its value, pro- 
viding, always, the thing is useful, possesses de- 
sirability, and that the labor which produced it 
was of standard efficiency. 

I have also accepted, as far as it applies, the 
doctrine of the Austrian school, that value is de- 
termined by subjective imputation; in other 
words, that the value of a thing is determined by 
whatever value estimate men generally put upon 
that thing, hence, in this sense, value is a psychic 
phenomenon or fact. Granting that value in this 
aspect, the utility aspect, depends upon men's 
estimate, it has been my complaint that these 
estimates are made in igross ignorance, often 
are utterly absurd and foolish, and incredibly 
unjust. And I have pleaded for saneness and 
common sense in value estimates, have insisted 
that it is the duty and the function of thinkers 
and leaders of men, of philosophers and teachers, 
and especially of economists, to enlighten and in- 
struct the world for the making of true and ra- 



I3B ULTIMACY IN VALUE. 

tional value estimates; and to put the value esti- 
mate primarily on the labor that produces, rather 
than on the thing produced. My whole argu- 
ment has been to convince men of the justice and 
the reasonableness of estimating at equal value 
all useful labor of standard efficiency. This once 
accepted, then the value of things becomes some- 
thing definite and ascertainable, a mere summing 
up of the hours of standard labor embodied in 
any given article, instead of the blindly groping, 
haphazard, absurd, juggled, or whimsically 
false estimate which at present it generally is. 

The following eight statements now compactly 
summarize my value theory: 

I. Economic value is the quality or capability 
of a thing, directly or indirectly, to satisfy legiti- 
mate human wants or desires. 

II. Economic value is the product of human 
labor, physical or mental, embodied in concrete 
things, for direct or indirect use in satisfying le- 
gitimate wants and desires that tend to preserve 
or enlarge human life. 

III. Utility, or usefulness, is but another name 
for capability to satisfy human wants or desires. 
Utility therefore is the essence of value. 

IV. To embody utility or value in a thing 
requires human labor; and this involves sacrifice 
of leisure and ease, and necessitates the steady 
application of mental or bodily energy during 
appropriate periods of time. This application of 
energy is called labor burden or labor pain; it 
is the original value equivalent, and is quantita- 
tively designated by time of duration. The labor 



SUMMARY OF VALUE THEORY. 139 

hour therefore is the quantitative measure of 
value. 

V. But since some labor may be misapplied 
or inefficient as a producer of value, it is neces- 
sary to specify that this value-measuring labor 
be applied to ends of usefulness, and that it be of 
standard efficiency. 

VI. Since labor implies the expenditure of 
energy and life force; and since one man's life 
and vitality is as dear and as valuble to him 
as another's is to that other, it is self-evident that 
one man's sacrifice in labor pain must be ac- 
counted equal with that of another man's, and 
therefore entitled to the same consideration and 
recompense. Hence we cannot escape the con- 
clusion that one man's labor pain endured for an 
hour, is the exact equivalent for another man's 
labor pain endured for an equal length of time. 
It therefore follows that all useful work, in jus- 
tice and on principle, should be compensated alike, 
hour for hour, provided such work is of standard 
efficiency. 

VII. The hour, or time-length, of standard 
labor, then is, or should be, the actual value de- 
terminant, and should measure the economic 
value of every producible article of exchange, 

VIII. This labor hour value may be trans- 
lated from a time expression into the terms of 
some current value medium, or medium of ex- 
change, called money; and this money equivalent 
of the standard labor hour can be arbitrarily 
chosen at some appropriate figure, and with rea- 
sonable approximation to the labor time value of 
the money material used for the money units 



140 ULTIMACY IN VALUE. 

or larger coins, insofar as a money material of 
intrinsic value is deemed advisable. 

This summarizes the value theory presented in 
my book. 



In statement V^III, I have assumed a money 
medium or currency in which to give convenient 
expression to the value of an hour's standard la- 
bor, or in other words, to express the labor hour 
as a money quantity. Strictly speaking this is 
not necessary, but it may be expedient; and I 
have inserted it in order to assist the reader in 
grasping this value concept, and let him feel that 
he has something tangible and concrete to lay 
hold on, as explained a few pages back. Instead of 
assuming such a money expression^, some frac- 
tional part of a dollar, as being the money value 
of an hour's standard labor, let us assume the 
hour ticket or bill to be the unit of value in a 
new money system, consisting of, say, one-hour 
bills, two-hour bills, five-hour bills, ten-hour bills, 
and so on; supplemented by a fractional cur- 
rency of S-minute checks or slips or stamps, 10- 
minute stamps, 15-niinute, and 30-minute stamps. 
And there is nothing in the world to hinder us 
from further assuming that these minute stamps 
may be put upon round pieces of metal, nickel, 
or silver, just like our present 5-cent, 10 and 25- 
cent coins now in use. And the hour and two- 
hour check may be stamped on pieces of silver, 
the five and the ten-hour check upon pieces of 
gold ; just as is our present gold and silver money, 
and circulating precisely as does the money of 



SUMMARY OF VALUE THEORY. 141 

today. Thus you would have the conventional 
money and the labor-time check absolutely merged 
and identical one with the other. What is to 
hinder this? Nothing whatever. Nor is there 
anything to hinder the adoption of a combination 
of the old with the new system, so as to retain 
the decimal features of the present system for 
convenience in computation and for the smallest 
fractional denomination. 

I have said that this essay of mine is a treatise 
on the "value" problem; it does not pretend to 
cover the whole field of economics; and I have 
repeatedly said that I shall not deal with the ques- 
tion of "money" or the medium of exchange. 
Nevertheless, the suggestions given here, and in 
statement VIII, present the fundamental facts 
and basic principles upon which a rational me- 
dium of exchange or money system may be 
worked out. 

Some points have been too briefly discussed in 
these chpters; they will be taken up in Part III, 
together with a few additional matters. I shall 
now close this chapter with one more appeal to 
the reader's heart and sense of fairness in be- 
half of the principle of equal compensation. 

Reader, whoever you be, but especially if you 
are a skilled mechanic and a union man, I ask you 
to read once more the propositions set forth 
above, to establish a new money system, consist- 
ing of hour checks or bills and minute stamps 
instead of dollars and cents, and try to grasp the 
significance of that proposition. Then call to 



142 ULTIMACY IN VALUE. 



1 

mind the words of Scotland s ploughman bard, 
Robert Burns, who wrote 

Then let us pray that come it may 

As come it will for all that, 

That man to man the world o'er, 

Shall brothers be for all that. 
And think then of that ''parliament of man'' 
which surely will meet in every advanced nation 
ere many years, and in which all manner of 
labor will be represented in proportion to their 
number and real importance, to deliberate on 
the establishment of industrial justice within their 
respective countries. And suppose then, what 
is more than likely, that such a parliament de- 
cides to establish the labor hour money system, 
which implies the payment of an hour check for 
every hour's work of standard efficiency. Is it 
to be supposed that anyone w^ould stand up in 
such an assembly and say: You may pay Tom 
or Dick an hour check for an hour's work, but 
my name is Harry and I insist upon getting two 
or three hour checks for an hour's work of mine. 
Is it to be supposed that any man would have the 
impudence to make such a demand? 
Reader, would you? 

For all that and for all that. 

It's coming yet for all that. 

That man to man the world o'er. 

Shall brothers be for all that. 



PART III. 

APPLICATION. 

Chapter IX. 

Application of Value Theory. Some Objec- 
tions Answered. 

It has been shown in chapter II. that econ- 
omists have so far not established a theory of 
value which is generally accepted as satisfac- 
tory and true; also that several of the later 
writers on economics virtually confess value to 
be an unsolved problem in economics. The pres- 
ent writer thinks he has solved this problem by 
combining the labor cost doctrine with the util- 
ity doctrine and giving both a wider and a deeper 
meaning; and that by specifying useful labor of 
standard efficiency he has reduced the value de- 
termining labor to that homogeneity which is 
necessary for a common denominator of value. 
I have enlarged upon, and emphasized, Adam 
Smith's doctrine, that labor, the toil and trouble, 
or labor pain, of producing a thing, is the original 
cost and purchase price of such thing, and that 
conversely this labor pain is what such a thing 
essentially is worth in further exchanges. I have 
dwelt upon this and repeated it time and again. 
For right here lies the difficulty that most men 
will experience in accepting, and indeed in com- 
prehending, the idea that value and labor pain 
are true equivalents; in fact, we may say they 
are but two names for the same thing. 

143 



144 APPUCATION OF VALUE THEORY. 

It will quite readily be granted that the pain, 
labor pain, in Smith's back and muscles, or head 
if you please, is entitled to the same considera- 
tion as is the labor pain in Johnson's back and 
muscles or head; and that the sacrifice of leisure 
and ease of the two is to be taken as equal, hour 
for hour. But that this naturally makes the 
value of Smith's and Johnson's labor equal, and 
their labor products equal in value, that will not 
readily be admitted, even when it is specified that 
both are engaged in useful work and both show 
standard efficiency; because this is such an un- 
usual idea, so contrary to the world's universal 
habit of thought. Verily, it is an unusual idea, as 
unusual as absolute truthfulness, uprightness, 
and as a modest estimate of self is unusual. 

He that through ages has been downtrodden, 
enslaved and made to perform hard labor at the 
meanest compensation, him the world has in 
course of time come to look upon with contempt, 
and as a man of very small value, and his labor, as 
well as his labor product, has been regarded as of 
correspondingly low value; while he who by 
shrewdness or by force of combination and special 
privilege has been enabled to exact a high price 
for his labor and his products, came in time, for 
that very reason, to be considered a very valuable 
man, and his work has enjoyed a high value esti- 
mate. This, of course, is not granting equal con- 
sideration for the labor pain of all men; and to 
this evidently no one gave a thought in times 
past, though I believe the world is now a little 
more inclined to estimate one man's labor pain 
equally with another's. But that equality of labor 



SOME OBJECTIONS ANSWERED. 145 

pain also implies equal value of the labor and of 
its product, when that labor is useful and of stand- 
ard efficiency, that is as yet perceived by only a 
few. 

, This, however, is of the utmost importance, is 
fundamental to my entire economic reasoning and 
to the value theory here presented; and is abso- 
lutely essential, I claim, to the world's orderly 
progress, as well as to world peace, and to hu- 
man welfare. 

Realizing how difficult it will prove for the 
average man to grasp and to understand the rea- 
sonableness of all this, I have devoted the larger 
part of my book to endeavors at making this plain, 
and to convince men of the feasibleness as well 
as of the equitableness of this equal compensa- 
tion idea. I have contended that this idea and 
the value theory based thereon hold true, whether 
we assume private or public ownership of land 
and natural resources, privately owned or col- 
lective capital, a commodity money or a token 
money (labor hour checks). I have also con- 
tended that the world is even now, under the 
prevailing economic system, slowly gravitating 
toward approximate equality of compensation 
for industrial labor; though that movement may 
be so slow and so unconsciously followed as to 
go on practically unnoticed. I have further con- 
tended that the ever recurring disputes and 
strikes about wages cannot be tolerated forever; 
that a way of settlement must be found which 
settles these disputes once and for all; and that 
the only settlement of these disturbances, and of 
this industrial war, is the establishment of equal 



146 APPLICATION OF VALUE THEORY. 

compensation for all useful work of standard 
efficiency. 

All this does not necessarily imply a socialized 
state; it applies in great measure to present com- 
petitive society with its private enterprise and 
initiative; and it applies still more largely to any 
transition stage toward a socialized state, which 
unquestionably the future will bring; while a 
socialized state without this equal compensation 
would be the merest travesty. This equal com- 
pensation for useful labor of standard efficiency 
is the very essence of that equality and frater- 
nity of which reformers have been dreaming, and 
toward which humanity has painfully and blindly 
been groping throughout the ages. It is also more 
readily comprehended in connection with a social- 
ized state, and by people whose sentiments incline 
in that direction, than by those whose thoughts 
are too firmly anchored to the old institutions. 

As an illustration of this I may cite the objec- 
tion made by a neighbor who had difficulty in 
accepting the equal compensation idea, and who 
could not see how such a scheme could possibly 
be applied in practice. Suppose, said he, I am 
a farmer and I need the labor help of eight men ; 
and suppose two of these are capable, efficient 
workers, on whose labor I profit, four are indiffer- 
ently good, I neither gain nor lose on them, but 
the remaining two are no good at all, on them 
I lose; how could I in justice pay all the same 
wages ? 

Well, said I, your supposed case is not in point, 
for it disregards the distinctly specified condi- 
tion which I have emphasized time and again. 



SOME OBJECTIONS ANSWERED. 147 

that the labor is to be of standard efficiency. 
The two ''no good'* fellows would be kept in the 
apprentice class until they come up to standard 
ethciency, not till then would they be entitled to 
standard pay. There would be this difference 
however in the cases of such as between then and 
now, that now they are set adrift to shift for 
themselves; to grope and blunder through life, 
sinking lower and lower until they become down 
and outs; whereas, under a sane and humane 
regime they would be assisted with instruction, 
advice, and guidance, and perhaps transferred 
to other work, to the kind of work in which 
they had the best chance of becoming proficient 
and of reaching standard efficiency. Thus they 
would be encouraged ; the helping hand of society 
would be extended to assist them to find their feet, 
instead of abandoning them to their fate and to 
the unfortunate consequences of their unpropi- 
tious heredity, which, as pointed out before, is 
their misfortune, not their willful choice. 
Furthermore, the case is not supposable in a ra- 
tionally organized human society, in a socialized 
state, such as we surely shall have ere long, where 
you, good neighbor, cannot be supposed to have 
monopolized eight times as much land as your- 
self can cultivate, and to have eight of your 
fellow-mortals come to your door begging for 
work, they having been kept out of their share 
in the soil, the common inheritance of the race. 
It will readily be seen that taken in conjunc- 
tion with a socialized state, or merely with a 
consciousness that such a state is even now in 
process of development, the equal compensation 



148 APPLICATION OF VALUE THEORY. 

idea becomes much easier of comprehension and 
of acceptance. The fundamental principle of my 
value theory, as repeatedly given, is concretely 
stated lin this proposition or demand: Equal 
compensation, hour for hour, for all kinds of 
useful work of standard efficiency, male or fe- 
male. But the mere statement of such a demand 
would by no means carry conviction to the mind 
of the reader. It would be brushed aside at first 
sight and dismissed as absurd, because it is so 
unusual and so contrary to general notions. And 
it must therefore be repeated and restated time 
and again, and be supported by all the resource 
of argument its advocate can command. It was 
therefore necessary to devote a large part of my 
book to the effort of convincing the reader that 
this demand and this idea of equal compensation 
for all kinds of work of standard efficiency is 
right and reasonable, fair and desirable, neces- 
sary and inevitable. For, as repeatedly stated, 
upon the acceptance of this principle of equal 
compensation rests my value theory; and if such 
acceptance does not ensue then my value theory 
stands rejected and my book becomes a failure. 
In such case I can only hope that there may come 
another, who possesses the necessary power of 
exposition and persuasion, of lucid and convinc- 
ing presentation, who will succeed where I have 
failed. 

I shall now try to meet various objections, 
and offer tentative solutions of some of the many 
practical difficulties that naturally will suggest 
themselves to the thoughtful reader. I am aware 
of the fact that these difficulties are many and 



SOME OBJECTIONS ANSWERED. 149 

perplexing, and that some of them are so stu- 
pendous as to seem unsolvable. But it is not 
my task to go into details of arrangement and 
adjustment; these will necessarily have to be de- 
termined as they present themselves in the course 
of societary development along the lines of the 
new economic principles and theories here pre- 
sented. My task is primarily to present those eco- 
nomic principles, particularly a value theory, upon 
which the new era economics is to be based, and 
in accordance with which the future society must 
be organized. 

Let me also remind the reader that the value 
theory here presented is distinctly restricted to 
economic values, to the values of economic prod- 
ucts and services; but is not concerned with the 
determination of moral, artistic, or esthetic values. 
Professional work, which does not more or less 
directly enter into economic services or products 
of exchange, is, strictly speaking, not comprised 
in the proposed system of evaluation, though 
much of the same will by analogy and associ- 
ation be affected and influenced by value notions 
regarding industrial labor. My value theory 
is concerned with and applies to strictly economic 
labor and labor products, those things that make 
up the material essentials of life, summed up as 
food, clothing, and shelter, and the necessary 
transportation incidental thereto. Besides the 
primary effect of this value theory, of putting 
the fairest and most equitable valuation on prod- 
ucts and on labor that limited human wisdom can 
devise, it has the simultaneous secondary effect 
of automatically bringing about a just distribu- 



ISO APPLICATION OF VALUE THEORY. 

tion of the nation's annual wealth product, and 
of so distributing the nation's domestic purchas- 
ing power as to synchronize consumption with 
production to any desired degree of closeness. 
That is to say, consumption will keep step with 
production, as closely as may be deemed advis- 
able. Gluts of the commodity market, and conse- 
quent stagnation of production with resulting 
unemployment and distress, such as periodically 
afflict present society, will be effectually prevented. 
This secondary effect is of course of the ut- 
most importance. In fact, it is the prime object 
of the entire proposal, since it is that which shall 
abolish poverty and slums, put an end to pre- 
cariousness of employment and enforced idleness, 
and yield to all honest and useful labor its true 
and legitimate reward. With these things this 
value theory is concerned, and for such ends has 
it been been reasoned out and formulated. This 
object is of paramount importance to the human 
race and should outweigh all difficulties, how- 
ever great, that have to be met in accomplish- 
ing the same. It is then a proposition in the inter- 
est of democracy, of the common man, the ordi- 
nary useful worker and citizen. It is not put 
forth in behalf of the uncommon man, he who is, 
or fancies himself to be, a genius, an artist, poet, 
or philosopher. However desirable and worthy 
of appreciation the work of such men may be, 
it stands outside the realm of economics proper, 
and it cannot be evaluated on the labor hour prin- 
ciple. These people form a province of their 
own, they and their work must be judged by 
standards apart from economics. They have 



SOME OBJECTIONS ANSWERED. 151 

nothing to do with the daily wants of all men for 
food, clothing, and shelter, the essential neces- 
saries of life. They belong in the realm of orna- 
mentals, luxuries, fancies, whims, recreations, 
and mere pleasures; and the value of their work 
is, generally speaking, not measurable in terms 
of material things. He who ploughs and reaps, 
hews wood or digs coal, builds houses, streets, 
sewers, canals, or roads, sweeps streets, washes 
clothes, or makes any useful thing, he creates 
real value; of this there can be no doubt, and 
his claim for compensation is not to be questioned. 
But he who paints a picture, writes a poem or a 
book, as this one of mine for instance, he pro- 
duces work which may be of surpassing worth, 
or it may be rubbish. Who shall decide that? 
Economics cannot determine that, and assign him 
a compensation; his labor and his product lie 
outside the proper province of economics. Let 
his be a labor of love, largely performed during 
leisure hours, and let him be content if he reaps 
a pecuniary reward, and also be content if re- 
ward is denied. Much of the best work in art 
and literature, as well as in reform and philan- 
thropy has always been done on those very terms 
and is, so done in our day. The reward for non- 
industrial work was considered at some length 
in chapter II, and the reader is referred to those 
pages. 

But I am to meet some of the objections that 
naturally are to be expected, and I shall consider 
first the most weighty and important of these, 
namely, the objection that such a scheme of com- 
pensation would remove the incentive of per- 



1S2 APPUCATION OF VALUE THEORY. 

sonal gain. This incentive, many insist, is in- 
dispensable for spurring men to steady and effi- 
cient work, indispensable for invention and 
progress. I believe it was Emerson who put this 
in a ,homely phrase by saying that men are as 
lazy as they dare be. It were idle to deny the 
force and the seriousness of this objection, and 
I make no attempt to do so. I recognize its 
weight and shall try to meet it as fully as I know 
how, pointing out, in the first place, that the spur 
of such an incentive, though softened, is not 
wholly removed in the contemplated new indus- 
trial order of things, where employment is to be 
had for the asking and compensation equal for 
work of standard efficiency. In the fact that 
standard efficiency is required in order to secure 
standard compensation there may be incentive to 
exertion sufficient for all practical purposes; and 
remember, that standard efficiency is not merelv 
to be reached by the young worker, but it is to 
be maintained, as described in chapter III. This, 
together with man's natural pride, each one desir- 
ing to stand as a man among men, entitled to the 
respect of his fellows, not despised as a shirk 
and a slacker, the more so when all are conscious 
of the fact that the shirking of one immediately 
and directly puts an extra burden on the others; 
this, I think, may safely be relied on to make 
practically each one wish to do his full duty, and 
to overcome the innate tendency to indolence 
and ease of which we all have a share, some more, 
some less. 

Moreover, I would ask these objectors and 
sticklers for the incentive of personal interest, 



SOME OBJECTIONS ANSWERED. 153 

how effective does that incentive prove today, 
under the present economic regime? Are there 
no shirkers and dehnquents today? There are 
indeed; and they constitute one of the most per- 
plexing problems of present society. Criminals, 
those that prefer piracy and predation to honest 
toil; also the demoralized; the discouraged and 
discomfited in life's struggle; the wrecks; the 
down and outs; these constitute a large class in 
present society whom this highly praised incen- 
tive has been unable to save. I do by no means 
claim that the problem presented by these people 
would be automatically solved by the reconstitu- 
tion of society along the proposed lines; or that 
crime, vice, licentiousness, and indolence would 
at once disappear. But I do firmly believe that 
the difficulty of dealing with these problems would 
be very materially reduced. There will no longer 
be the excuse of not being able to find work, 
which today in many cases is but a welcome pre- 
tense. The stress of starvation wages would no 
longer excuse slum dwelling, nor excuse denial by 
parents of proper schooling to children and the 
putting of them into factories or on the streets 
to earn a few dimes. Whatever disadvantage 
may follow from reducing this incentive to exer- 
tion, the advantage of the new economics and 
the new social order based upon this value theory 
seems to me so great, that no difficulty of detail 
ought to daunt men in establishing the new order. 
However, as previously stated, my task is to pre- 
sent this value theory, and particularly to sub- 
mit the same to the consideration of economists ; 
while the working out of details of application 



154 APPLICATION OF VALUE THEORY. 

had better be left to those who come later, after 
the value theory has been passed upon, and has 
met at least some measure of acceptance. 

But this objection of loss of incentive may seem 
to lie in a particular sense against the equal com- 
pensation idea. It may be claimed that if all 
work is paid alike no one will trouble about learn- 
ing a trade requiring skill and training, not to 
speak of undertaking the tedious and wearisome 
task of preparing for a profession, when no re- 
ward of higher compensation is in prospect. This 
consideration does indeed seem weighty, but 
it will on closer examination be found much less 
weighty than appears at first thought. It has 
already been stated that part of the professions 
may find fields of activity outside of public em- 
ployment, and therefore stand outside the rating 
of the equal compensation scheme, while artists, 
writers, philosophers, and preachers stand dis- 
tinctly outside this scheme. Irrespective of this, 
it is well known that individuals who strongly 
feel called to write, preach, sing, or paint, much 
prefer to follow such inclination, regardless of 
pecuniary rewards or denials ; and it is not to be 
doubted what their choice of occupation would 
be, though the money reward for plying their art 
were no greater than for ordinary labor. I be- 
lieve it was Proudhon who long ago said some- 
thing to this effect that if the prima donna were 
given the choice between scrubbing floors or 
singing at the same compensation, there could 
be no doubt that she would choose to sing. 

This reasoning applies to all such professional 
work as would come under the equal compensa- 



SOME OBJECTIONS ANSWERED. 155 

tion scheme, such as the greater part of teach- 
ing, industrial art, structural and mechanical de- 
signing, accounting, and the public health service 
of medicine, dentistry, and pharmacy. And the 
same reasoning applies to skilled labor as against 
common labor occupations. Most boys early show 
a liking for certain kinds of activity, and by far 
the greater number delight in handling tools. 
Some want to be sailors, some railroaders, some 
incline to various trades; want to be smiths, car- 
penters, masons; while others naturally take to 
salesmanship and office work. And still others 
show a liking for plants and animals and will 
prefer gardening or farming as an occupation. 
Nearly all will have a second and third preference, 
and if they cannot be given their first choice 
will take second or third choice and be pleased 
at that. Also let it be remembered that ap- 
prenticeships will be of short duration; with the 
preliminary advantage of vocational school train- 
ing, and work organized in the interest of the 
community, apprentices will be properly taught, 
not left to pick up a knowledge of their craft bit 
by bit as opportunity offers. Therefore two years 
will be ample time to give any young person of 
average intelligence a sufficient knowledge of a 
trade to pass him or her to the class of junior 
workers. 

With such facility for acquiring a trade at 
comparatively little effort and self-denial, the 
problem will not be: is anyone going to learn a 
trade and become a skilled mechanic, but rather, 
will there be enough left who do not learn a trade 
and who are willing to remain at rough common 



IS6 APPLICATION OF VALUE THEORY. 

labor, though the pay be the same for both kinds. 
The insufficient number of common laborers, 
rather than their excess, may present a difficulty, 
and may even necessitate paying a premium for 
that sort of labor in order to induce a sufficient 
number to engage in that kind of work. Men 
naturally take a pride in being able to perform 
the more difficult kinds of work, and would pre- 
fer the finer and more genteel occupations, even 
though the compensation be no higher than for 
the rougher, coarser, dirtier, and more disagree- 
able work. This also applies to the professions 
and semi-professions. There need be no mis- 
giving, lest there should not be a sufficient num- 
ber of candidates for the professional and semi- 
professional work, and for the skilled trades, 
under a regime of equal compensation in these 
lines and for common labor. 

Next in order of importance I would put an 
objection which holds, not particularly against 
the equal compensation idea, but in general 
against nationalized organization and control of 
production and distribution. Call this what you 
please, state socialism, collectivism, or merely ex- 
tension of government function, making govern- 
ment employes of the greater number of indus- 
trial and transport workers. As has been pointed 
out before, state socialism is not necessarily im- 
plied by the equal compensation idea; yet there 
is a close kinship between the two ; and as stated 
on a previous page, I consider a socialized state 
unthinkable without equal compensation for use- 
ful labor of standard efficiency. Without that, 
socialism is a travesty and a mockery. But I 



SOME OBJECTIONS ANSWERED. 157 

may just as well now face this objection to na- 
tional control of production by admitting the 
force of the objection and making answer. Let 
us grant, for the sake of argument, that collec- 
tive industry would necessitate a vast number 
of supervisors, inspectors, accountants, auditors, 
stock-keepers, time-keepers, and clerks; all of 
whom, in a sense, would be non-producers, and 
their pay would have to be taken out of the wealth 
created by the actual producers. Precisely the 
same overhead expense is imposed on privately 
conducted business today, with some additional 
items, which would largely be eliminated by col- 
lectivism. As such there is the purchasing agent 
found in all larger establishments, whose function 
is to negotiate or dicker for favorable prices on 
raw materials and subsidiary supplies; practi- 
cally all advertising expenses, costly illustrated 
catalogues, traveling salesmen, and the major 
part of correspondence and mail expense would 
be eliminated. Raw materials would all have a 
fixed price, and would be drawn from the nearest 
point of supply; and the products would be ship- 
ped to the nearest market of consumption, avoid- 
ing the criss-cross shipments in opposite direc- 
tions of like goods which now often occur, thus 
economizing on transportation. 

The man who single-handed conducts a peanut 
or candy stand, a cobbler shop, or runs a dray 
or an omnibus, such a man, in one sense, works 
under ideal conditions. He has no overhead ex- 
pense ; he needs no foreman, overseer or inspector 
to see that the work is done promptly and 
properly. He needs neither timekeeper nor 



158 APPUCATION OF VALUE THEORY. 

bookkeeper or cash register to see that none of 
his cash strays into wrong pockets. This, as I 
said, in one sense is ideal. But such extreme 
individuaHsm does not answer the requirement 
of an advanced civiHzation. Only the pettiest 
and most inefifective work can be done in such 
a way. The work and business of civilized life 
and its large undertakings require the acting to- 
gether of numbers of men in united and properly 
organized efforts. One smith can single-handed 
beat out a horseshoe, or hammer out nails, though 
in no quantity to compare with the forge mill 
and the nail machine. Yet he could do it, and 
it has been done in the past. But large engine 
shafts, or other forgings weighing tons, it is ut- 
terly impossible to handle in a one-man smithy. 
This requires large furnaces, steam hammers and 
cranes, and the united efforts of a number of men. 
And here comes in the overhead expense : super- 
intendence, inspection, designing, accounting, 
time-peeking, etc. This is the inevitable accom- 
paniment of every great enterprise or volumin- 
ous work, whether it be building, manufacturing, 
transportation, or distribution. This overhead 
expense attaches to all such work, whether it be 
carried on collectively or privately. It is even 
claimed that there will be less of this under social- 
ized control than under private; which may be 
true, since the necessity thereof will decrease in 
some directions while increasing in other direc- 
tions. It is not of record that the administrative 
expenses of the railroads were increased when 
the United States Government took control of the 
roads in 1918. But Mr. McAdoo shortly dis- 



SOME OBJECTIONS ANSWERED. 159 

pensed with the services of a great many attor- 
neys, and also with those of freight solicitors ; re- 
duced the advertising expenses, and the number 
of city ticket offices. 

However daunting may seem the immensity 
of the task of organizing and coordinating prac- 
tically the whole production and distribution for 
a nation of a hundred million people, or even of 
the several states separately, the task will have 
to be undertaken some day ; and if the nations in- 
volved in the present war, under the stress of that 
great struggle, found it necessary to assume con- 
trol of their productive and distributive business, 
as a means of self-preservation, perhaps they 
can fully as well find it both possible and neces- 
sary to do so as a means of self-preservation in 
times of external peace. 

It may be proper at this point to set at rest 
any doubt that some reader might have, as to 
the ability of the state or the community to find 
employment for all comers; such reader basing 
his doubt upon the predicament of the private 
employer of today, who can give out no work 
if the same is not first given to him, and who 
stands utterly helpless in times of panic or busi- 
ness stagnation. Against such a predicament 
the state, or society, is immune when the nation's 
labor is controlled and organized for production. 
Then there can be no stagnation of that sort, and 
no misery-breeding unemployment; not as long 
as the sun shines, the rains descend, grass grows, 
and the earth yields crops and other material re- 
sources. All that man requires in life may be 
roughly classed under six heads : food, clothing. 



i6o APPUCATION OF VALUE THEORY. 

shelter, transportation, education, and recreation. 
The last two are not strictly economic items. 
Civilized man may be expected to provide for 
education by setting aside sufficient means to 
pay the expenses thereof, and he will indulge 
joy-riding and recreation as he finds the means, 
or cut out these things as the means thereof fall 
short. But food, clothing, and shelter, which 
includes transportation, are the indispensables 
that economics is primarily concerned with; and 
considering these three only, for the sake of sim- 
plicity, we can emphatically assert that these 
three will always occasion ample employment for 
all comers ; and that whenever the supply of these 
things is so abundant that no one needs be hun- 
gry or naked, or without shelter, then by that 
very fact the misery of material want is blotted 
out, providing, of course, that these things are 
properly distributed, a distribution which this 
new era economics will automatically effect. 

The whole world needs food, clothing, and shel- 
ter; well then, let all the world fall to and pro- 
duce food, clothing, and shelter ; and all the world 
will have these things; also, all the world will 
have employment. It is the business and duty 
of society, through its executive agents, the 
various branches of government, to organize and 
control the work of producing food, clothing, 
and shelter ; to fit each man and woman for some 
part of this work; and to assign a place therein 
for each one who is able and willing to work. 
No individual, no "interests," and no "vested 
rights," can any longer be permitted to stand as 
a bar between man's need of food, clothing, and 



SOME OBJECTIONS ANSWERED. i6i 

shelter, and his employment at producing these 
things. Should these things become too abundant 
under an eight-hour workday, then let the time 
be reduced so as to provide only for a reasonable 
excess over the annual need, that any unexpected 
shortage due to unfavorable seasons or partial 
crop failure may be met. 

The world has for centuries been able to divert 
great numbers of men to other pursuits, educa- 
tional, and for recreation or amusement, not to 
speak of the wastes of wars and armaments. 
And the world does so divert today, and will in 
the new era be able to spare from the work of 
producing food, clothing, and shelter vast num- 
bers to engage in educational pursuits, moral, 
scientific, and esthetic, in art and recreational 
work; with this difference however, as previous- 
ly mentioned, that anyone engaged in such lines 
of work, who finds that he has missed his calling, 
will not be doomed to starve in a garret; but 
will always find an open door at the public em- 
ployment bureaus, and be assigned some suitable 
work at which to earn an honest and decent liv- 
ing. Since such people, whatever betide them, 
will still need food, clothing, and shelter, society 
cannot deny them a chance in some way to help 
at producing food, clothing, and shelter, their 
very need of these things, like the need for same 
of all other people, being a source of employment. 
There is no room for doubt that the socialized 
state can give employment to all comers, till the 
end of time. 



Chapter X. 

New Era Society. Further Application of 
Value Theory. 

In Part II, it was assumed that in the sane and 
rational society of the future, the nation's labor 
would be organized for effective production, not 
for defensive economic warfare as in the present 
competitive and antagonistic society, where each 
hand aims to grasp as much as possible, and 
where, as the slang expression has it, the devil 
takes the hindmost ; that is to say, the devil takes 
him who, either by his own fault or the fault of 
others, loses out in the game of grab. 

The conscious aim and avowed purpose of new 
era society will be to develop useful and efficient 
workers conjointly with good citizens, intelligent 
and upright men and women, each one having 
opportunity of becoming a lady or gentleman in 
the truer and deeper American meaning of those 
words. It will be understood that in order to 
lay claim to the appellation lady or gentleman, 
and indeed to the title of good citizen, he or she 
must above all things be a useful member of so- 
ciety, a worker of some sort, in some field of real 
usefulness; no parasite can in anywise claim 
good citizenship. The educational systems, there- 
fore, will be constituted to serve these ends, 
moulding the rising generations to usefulness as 
workers, as well as to good citizenship. The 
schools will be coordinated with, and be con- 
tributory to, the nation's organized production, 

162 



FURTHER APPLICATION OF THEORY. 163 

by vocational, manual, and technical training 
according to required needs. This coordination 
is indeed already in process of development, as 
any intelligent observer can see. The national- 
ized factories will continue the educative process 
of the schools by intimate cooperation with these, 
and by some sort of apprentice system which 
trains the young worker in a comparatively short 
time. The school training, and partly the train- 
ing in apprenticeship, will be at the expense of 
society, and this will offset claims to extra com- 
pensation that might be made on behalf of skilled 
workers as against the so-called unskilled worker. 
The same considerations apply to professionals 
and semi-professionals in the public service, such 
as doctors, teachers, draftsmen and designers, 
whose education and training will be acquired 
mostly at the expense of society. 

It was suggested in chapter IIL that the term 
of apprenticeship should not exceed two years, 
and a suitable apprenticeship wage should be 
paid, with increase every six months ; then the 
young worker, passing through his junior period, 
becomes a full senior or journeyman worker with 
full standard pay, his work having reached stand- 
ard efficiency. As explained, this labor hour of 
standard efficiency determines the value and the 
selling price of the various products. But now 
it will happen that a considerable labor product 
will enter the exchange market which is in part 
or wholly the product of apprentices, whose labor 
is not of standard efficiency, and who do not re- 
ceive standard pay, and whose efficiency will vary 
even during their six months periods of fixed 



i64 NEW ERA SOCIETY. 

compensation. And in consequence of this, some 
of these products may pass to the consumer 
above cost and some below cost. Now this fact 
may be seized upon by some stickler to condemn 
the whole theory as false and ''unscientific," not 
realizing that in doing so he merely shows his 
own ignorance and bigotry. In the first place, 
economics is not an exact science, like mathe- 
matics and physics, where matters can be proved 
by calculation, or demonstrated by laboratory ex- 
periments. No such demonstrations are available 
to economics ; here the experiments involve states 
or communities and may require decades of time. 
Most of its conclusions are reasoned out from 
incomplete data, reasoned to seeming self- 
evidency, but not easily susceptible of verifica- 
tion. Economics is called a science by courtesy, 
but has no claim to exactness; and the present 
writer has distinctly stated that he claims for 
his value theory no mathematical exactitude, but 
thinks it the nearest approach to exact industrial 
justice that human thought can devise, and the 
best means of securing industrial peace and gen- 
eral human welfare. Whatever inequality and 
injustice remains after this approach has been 
achieved, must be accepted on the principle of 
bear ye one another's burden, which, as pointed 
out before, is also quite largely required under 
present conditions. 

And on this principle of bearing one another's 
burden, the seeming failure of exact adjustment 
of rewards in the case of apprentices, and in the 
case of all other workers as well, must be accepted 
as part of the imperfection inhering in all human 



FURTHER APPLICATION OF THEORY. 165 

affairs. Furthermore, if the apprentice at first 
fails to render a full equivalent for the wages 
assigned him, let us consider that as part of the 
expense society assumes to educate him; and if 
later the value of his output exceeds his wage, 
let that help to even out matters between him and 
society. Fixing a sale price for the products of 
apprentice labor may either be left to the arbi- 
trary decision of competent judges, or be ascer- 
tained by having similar things produced by 
standard labor to determine their value and price. 
Considering that the period of apprenticeship will 
be short, while the average duration of a healthy 
person's active life as a full grade worker is 
thirty-five or forty years, this matter of ap- 
prentice compensation if after all not of any 
great importance. 

As a mode of providing the necessary revenue 
for defraying, in the main, the expenses of ad- 
ministration, education, public health and safety, 
hospitals, asylums, pensions, etc., I have sug- 
gested including in the selling price of every 
article produced in the national factories a cer- 
tain per cent, above the actual cost of production. 
This constitutes a form of taxation which would 
largely take the place of property taxation, 
where there will be little or no privately owned 
productive property to tax ; and this would reach 
every member of the community in his character 
as a consumer. It will be necessary though 
to supplement this scheme of taxation by addi- 
tional forms, designed to reach such production 
or business as may still be carried on outside the 
nationalized industries, so as not to give to pri- 



i66 NEW ERA SOCIETY. 

vate work an unfair advantage over the national- 
ized, through evasion of taxation. I beHeve it 
will be both necessary and expedient to leave a 
considerable field open for private activity, for 
work outside the nationalized industry and busi- 
ness; especially so during the transition period. 
For there will probably be a great number of 
natural malcontents who could not rest satisfied 
unless they had a chance to paddle their own 
canoe, or at least to have a try thereat. It may 
therefore be expedient, and indeed necessary, to 
provide a vent of escape for the spirit of discon- 
tent and fault-finding of people for whom it is 
difficult to submit to the strict discipline, prompt 
hours, regulation and supervision, which will be 
found inseparable from socialized production. 
Let such people open a cobblershop, a news or 
candy stand, barbershop, run a dray or wayside 
store ; subject of course to all restrictions of sani- 
tation and child protection rules, as well as to 
such detail of taxation as may be deemed neces- 
sary to prevent a number of men from combining 
in private enterprises with an unfair advantage 
over fully taxed public enterprises. Incidentally, 
such private enterprises may serve the useful 
purpose of setting a pace or mark of efficiency, 
below which socialized industry must not fall. 
Various license and administration fees, fines, 
and perhaps a poll tax, dog tax, and other luxury 
taxes may be continued to supplement the main 
source of revenue. And I am convinced that 
import duties will be continued. Every country 
will have to guard against being made the dump- 
ing ground of products produced by foreign 



FURTHER APPUCATION OF THEORY. 167 

underpaid labor. The universal policy of all 
leading nations will be to make their own country 
as near as possible industrially independent, pro- 
duce at home all that they possibly can, and im- 
port only what necessity compels, and thus 
provide in the largest possible measure employ- 
ment for their own people. It will be the 
conscious aim to reduce imports and exports to a 
minimum, the reverse of the present maddening 
frenzy for foreign trade. 

Closely connected with this matter of raising 
revenue to pay the salaries and other expenses 
of various administration activities and of so- 
called unproductive, or indirectly productive 
work, is the question of replacing old and worn- 
out machinery of production and transportation, 
and the necessary current stock of raw materials 
and partly finished commodities; or, in the lan- 
guage of economists, the replacing of consumed 
capital, and providing additional capital as the 
need for the same arises. I have hinted that such 
capital could be accumulated by making the per- 
centage of cost added to the selling price of manu- 
factured goods sufficient to provide for this item 
also along with the administration expenses re- 
ferred to above. In this way every individual will 
then pay a slight excess on any article he buys, 
and thus ''abstain,'' "save," and ^'create" tiny 
droplike amounts of capital, which by their great 
number will make up the mighty volume needed 
in the nation's work. And in this manner every 
member of society becomes a contributor to the 
national capital, a fellow capitalist with all other 
members of the community. Capital, according 



i68 NEW ERA SOCIETY. 

to accepted economists, is wealth withheld from 
immediate consumption and used for productive 
purposes, hence is said to be the result of 
abstinence or saving. I find no fault with this 
definition, and I accept it as holding true what- 
ever the form of social organization may be, in- 
dividualistic or socialistic. In a socialistic state 
abstention will be as necessary in order to provide 
machinery of production and transportation as 
under any other form of society. A certain 
amount of labor must be set aside and devoted 
to producing this machinery, this "capital," which 
cannot be eaten as food or worn as clothes. 
That means abstention, that is saving, and that 
will have to be practiced in any kind of civilized 
society. 

Some writers have thoughtlessly asserted that 
capital does not result from abstention, because, 
as they claim, the abstainer as a rule is not in 
possession of the capital. That claim may be 
true, or largely true, but it is not in point, for it 
does not alter the fact that somebody must ab- 
stain in order that products may accumulate, 
no matter in whose hands the accumulation may 
finally lodge. If the possessing capitalist under 
the present regime does not really practice self- 
denial, does not himself abstain, yet it may be he 
who compels others to abstain and thus brings 
about the accumulation of capital. And per- 
haps this prodigally inclined humanity would 
not have abstained otherwise than under such 
compulsion. If this is true, then the private capi- 
talist has in this wise fulfilled a certain sociolog- 
ical and necessary function, the necessity for 



FURTHER APPLICATION OF THEORY. 169 

which will vanish when collective abstention and 
saving in a socialized state, as indicated above, 
takes the place of the private saving and absten- 
tion which is necessary today. Possibly even 
then some scope may still be left for private sav- 
ing and private capital, especially in the transi- 
tion period. 

The application of this theory of value and the 
equal compensation scheme to industrial work 
and to the great transportation enterprises, 
seems to the author a comparatively simple mat- 
ter, as also does the taxation scheme here out- 
lined to replace the property tax of the present. 
But the application of both the value theory and 
its price determining function, as well as the indi- 
cated taxing scheme, to agriculture and agricul- 
tural products, presents peculiar problems of far 
greater difficulty; because of the much greater 
diffusion of private ownership, and the conse- 
quent unshakeable and unquestioning belief in 
the correctness, justness, and inviolability of pri- 
vate ownership and individual control of the soil 
and its products. Only where farmland is con- 
centrated in large estates, owned by a numerically 
small class, while the tilling is done by tenant 
farmers and landless laborers, is there any likeli- 
hood that the socializing or nationalizing of agri- 
cultural land will ever be an accomplished fact. 
But not so where the land is held in small jparcels 
by a lare:e class of individual owners, whose num- 
ber runs into millions. The Russian peasant was 
quite ready to dispossess the big landowners dur- 
ing the Bolshewick regime, but it is not of record 
that they meant to socialize or nationalize the 



170 NEW ERA SOCIETY. 

land; each was eager to make a parcel his own 
private possession, and the large landowners, 
being comparatively few in number, were power- 
less to resist the swarming peasants. But no 
Bolshewick decree would be able to terminate the 
private possession of a land-owning peasantry if 
the same outnumbered the Bolshewick army three 
to one. In what manner agricultural land is to 
be nationalized, if ever, in countries like France 
and the United States, with their great number 
of small land-owning farmers, and each one a 
voter, I have no idea, unless it be by a gradual pro- 
cess of voluntary association and combining, per- 
haps within counties or townships. Or if perhaps 
a rapid process of concentration of land property 
and elimination of small owners under the com- 
petitive stress of the present regime should take 
place, and produce a small number of large 
owners, and a large number of tenant farmers 
and hired farm laborers. Such a condition might 
eventually lead to expropriation and perhaps to 
nationalization of the soil. But such a devolution 
is hardly to be expected, and would be most de- 
plorable. 

Many of the ancient nations were city repub- 
lics, or city states, and these dominated and 
controlled the land and had the same tilled, mostly 
by slaves. In the Middle Ages the land was like- 
wise tilled by serfs, possessing neither the land 
nor enjoyinp- any political rights. But in modern 
times the tiller of the soil has in all advanced 
countries become the most important and power- 
ful economic and political factor. It is he to 
whom all others must look for sustenance, and 



FURTHER APPLICATION OF THEORY. 171 

he cannot be dealt with by force, but only by 
bargaining. And while he may not, and in fact 
does not, in advanced countries outnumber the 
other elements of population, yet he will always 
be numerous enough to command respect; and 
he holds the whiphand over the rest, because it 
is he who holds the bread basket of the race. 
If out of this situation there should in course 
of time be engendered a serious antagonism 
between city and country, that were a most 
lamentable result; and it is my hope that this 
gospel of equal compensation for all kinds of 
useful labor, including the farmer's labor, will 
head off such a calamity. 

However, as admitted above, the application 
of these principles to farm products and to farm 
labor presents special difficulties, the more so as 
there will be little or no sentiment in favor of 
nationalizing the land, and thus cause it and the 
labor of tilling the soil and marketing the crops 
to be publicly organized and controlled. The de- 
mand for nationalizing the land comes from city 
people, from radical labor and reform organiza- 
tions, not from farmers or farm land owners. I 
doubt very much that the mere mental realization 
that this earth and the life-sustaining soil is the 
common inheritance of the race, that theoretically 
no individual man can of right claim to own the 
earth or a part thereof, will ever create a senti- 
ment in the minds of the present holders, strong 
enough to induce them to relinquish their private 
ownership and voluntarily yield possession of 
their lands for the purpose of nationalizing the 
same. It is possible that cities in their corporate 



172 NEW ERA SOCIETY. 

capacity may acquire large tracts of farm land, 
and there inaugurate systematically organized 
farming operations, under the same work and 
wage conditions that obtain in factories, and 
thereby establish rates of compensation for farm 
work, as well as cost and price of products in 
accordance with this value theory. And this, if 
successful, would set a pace and a pattern for 
individual and private farmers to follow, both 
in pay for help and in price for products. 

Another special difficulty in connection with 
agricultural operations, which will have to be 
met, is the variableness in crop yield according 
to favorable or unfavorable years or even sea- 
sons; to weather conditions, sometimes affecting 
comparatively limited areas. Also the unexpected 
appearance of insect pests, or plant and animal 
diseases tend to complicate the problem, since 
these vicissitudes may affect certain areas and 
not affect others in the same jurisdiction or ad- 
ministrative zone. This would present a prob- 
lem of averaging the labor hour output and the 
price to the final consumer, which ought to be 
uniform over a reasonably large territory, and 
preferably so, over an entire province or state. 
It would also be necessary to continue the realty 
tax on privately cultivated land, to offset the pro- 
duction tax on publicly cultivated land or its 
products. 

But all this is minor detail, and I remind the 
reader once more that my task is to present a 
value theory, not a fully detailed scheme of re- 
constituted society. I am presenting a theory of 
value, and T especially present this theory to the 



FURTHER APPUCATION OF THEORY. 173 

consideration and examination of economists, 
and to people who previously have given some 
thought and study to economics. Let such peo- 
ple pass judgment on this theory of value, and, if 
they should find it true, then perhaps someone 
will build upon that theory a complete system of 
economics, and others may perhaps essay to solve 
the implied difficulties, some of which I thought 
it advisable to mention as the chief ones, and for 
these I suggested tentative solutions. 

While it is for economists to judge this value 
theory, it is for men in general to show whether 
they are ready to accord equal value to all kinds 
of useful work of standard efficiency, and, of 
course, equal compensation for the same. This 
to my thinking is the only way to end the ex- 
ploitation of man by man; of establishing social 
justice and industrial peace; of abolishing pov- 
erty and slums ; of ending uncertainty of employ- 
ment and periodical stagnation of work, with its 
idleness and distress ; of removing from the 
minds of men the fear that some day poverty 
and want may overtake them, a fear that causes 
them greedily to grasp for all they can reach, 
to accumulate and to hoard as a protection aginst 
such a contingency. 

Men and brothers, are you ready for these 
things; are you capable of that high rectitude 
of spirit which refuses to over-reach and take 
advantage of another; which claims for itself 
no more than it is willing to grant to others; 
which is ready to pay with an hour's labor of its 
own for every hour's service rendered by another, 
or for every hour's labor product of another? 



174 NEW ERA SOCIETY. 

Or can you not rise to that measure of noble 
clear-seeing unselfishness? Do you insist that 
the "maddened crowd's ignoble strife" shall go 
on, "the good old way, the simple plan, that he 
shall take who has the power, and he shall keep 
who can''; that every man's hand shall still be 
raised against his fellow; that no one shall ask 
himself to how much or to how little am I entitled, 
but each shall aim for all he can grab and grasp 
of the nation's annual product; that graft and 
exploitation shall continue; that the severest, 
hardest, and most necessary labor shall continue 
to receive the meanest pay, and he who performs 
it be rewarded with contempt, while those per- 
forming lighter work are better rewarded, and 
some, whose work is of mere make-believe value, 
may be highly rewarded and greatly honored, 
because of the world's ridiculous and false value 
estimates? Do you want all this to continue: 
the strikes, lockouts, unemployment, the turmoil, 
and blind grasping, with its periodically inevitable 
culmination in war between nations? Men and 
brothers, the choice rests with you. 

I am presenting a value theory which is to 
cure the evils and effect the good things here 
enumerated. But this does not imply a sudden 
upheaval, and a violent overturning of the present 
social structure. It does not imply the imme- 
diate nationalization of the country's natural re- 
sources, and of the machinery of production and 
distribution. This theorv is applicable to present- 
day society, as well as to a socialized state and to 
a transition stage of gradual transformation from 
an individualistic society to a fully socialized 



FURTHER APPUCATION OF THEORY. 175 

State; while for the latter it is an indispensable 
feature. Applicable alike under privately owned 
land and capital and under publicly controlled 
land and capital, it is the very thing to promote 
a gradual and peaceful transition. 

Still another question may puzzle some read- 
er, and he may want to know how this value 
theory explains the value of a patent right, or 
the great value of corner lots on the principal 
streets of large cities. Well, these values are 
not explained or accounted for by this theory. 
These "values" are not labor products, and do 
not properly belong in the realm of economics, 
as explained in Part II, where this matter has 
been touched upon, and in the summary of the 
value theory. In so far as we conventionally call 
them values, and by the custom of centuries think 
of them as such, these "values" are created by 
legislative enactment, but not produced by labor. 
A patent right is a privilege of monopoly granted 
by legislative authority to inventors, giving them 
the exclusive right for a term of years to make 
and sell the invented article. This is as much 
a grant in reward for presumed or performed 
services rendered, as is the grant of a pension. 
The legislative wisdom of the founders of this 
government so provided in the constitution of the 
United States, and such appears to be the prac- 
tice in all advanced countries; and it was no 
doubt at the time an eminently proper provision, 
and the same will probably be continued, in some 
form, in socialized society. 

As for the great "value" of building sites in 
high grade business or residence districts, that 



176 NEW ERA SOCIETY. 

also is a matter which does not come within the 
province of new era economics. And the new 
value theory is not called upon to explain or to 
justify the same, any more than the economics 
of Adam Smith and J. S. Mill were called upon to 
explain and justify the value of slaves to the 
slaveholders, although chattel slavery actually 
existed at the time these men wrote their books 
on political economy. Human slavery is usurpa- 
tion and robbery by force or fraud of one man's 
freedom and personal service by another, for the 
benefit and advantage of this other; and private 
property in land is by many writers similarly 
characterized as based on force and fraud, on 
the disinheritance and despoliation of some men 
by other men. My theory is not concerned with 
"value'' founded on any such basis. There is an 
extensive literature on this question, and a school 
of writers on sociology and economics who hold 
the above view and who deal with the unearned 
increment of land values. Of these Henry 
George and the Single Taxers are examples. 

Even such a conservative economist as J. S. 
Mill makes statements like these: "Enough is 
known of rude ages to show that tribunals were 
established to repress violence and terminate 
quarrels, not to define rights ; and they gave legal 
effect to first occupancy, treating as an aggressor 
him who tried by violence to turn another out 
of possession. Let us suppose an initial com- 
munity, unhampered by previous arrangements, 
occupying for the first time an uninhabited coun- 
try. If private property fin land) were adopted 
we presume that it would be accompanied by 



FURTHER APPUCATION OF THEORY. 177 

none of the inequalities which obstruct the bene- 
ficial operation of the principle of private prop- 
erty in old society/' (Book 11, chapter I, p. 259.) 

''The *sacredness' of property does not un- 
qualifiedly apply to landed property. No man 
made the land. Its appropriation .is wholly a 
question of general expediency. When private 
property in land is not expedient, it is unjust. To 
be allowed the exclusive right over a portion of 
the common inheritance of mankind, while there 
are others who have no portion, is a privilege. 
In the very nature of the case, whoever owns 
land keeps others out of the enjoyment of it." 
(Book II, chapter II, pp. 295 and 297.) 

I accept the above as sane and sensible views ; 
and so I hold private property in land to be a 
privilege, granted and upheld by legislative en- 
actment upon the presumption that such private 
property is expedient, and in the totality of its 
effect is to the best interest of the race, as insur- 
ing a more efficient cultivation of the soil, better 
crop yields, and a fuller subsistence for the na- 
tion than otherwise would be had. Therein lies 
the expediency; but if it should fail in this, or 
if the attendant evils connected with private prop- 
erty in land are found to outweigh the advantages, 
then expediency demands a change, a restriction, 
or perhaps even the abolition of private property 
in land. However, as stated repeatedly, I have 
no intention to discuss the question of private 
ownership of land; I am advocating a value 
theory which is not dependent on the abolition 
of private ownership of land and capital, but 
which presents its own claims to a hearing, to 



178 NEW ERA SOCIETY. 

consideration and acceptance in present as well 
as in future human society. 

I have so far omitted any reference of Karl 
Marx and his economics, and I have felt tempted 
to omit any such reference altogether. But since 
I expect this book to be read and discussed by 
many Socialists, some of these might ask : Where 
does the Marxian economics come in; has this 
writer never heard of Karl Marx? 

To such I make answer that I have read 
Marx's work, Capital, and various interpreta- 
tions of Marxian economics by secondary 
writers; but I have not been able to escape the 
conclusion that whatever credit may be due 
Marx, and whatever else he otherwise may have 
accomplished in the interest of human progress, 
he certainly has not given us a theory of value 
that is rational and consistent with facts. Marx 
starts with the assumption that all commodities 
exchange in the everyday market at their true 
values; while I start from the exact opposite, 
that the world's value estimates of both the com- 
modities and the labor that produces them are 
false and cruelly unjust, and that this constitutes 
a fundamental cause of all economic evils. If it 
were true that commodities exchange at their 
just values, then economic reformers would be 
without a cause, for there would be nothing eco- 
nomic to reform, and we could sit down, fold our 
hands, and say: God is in his heaven, all is 
well with the world. 

But I do not propose here to open any con- 
troversy, or any discussion of Marxian econom- 
ics, or of his dissertation on value. Let them die 



FURTHER APPUCATION OF THEORY. 179 

a natural death as things obsolete and no longer 
up to date. I ask every reader to judge this book 
on its own merits or demerits, without reference 
to Adam Smith, Mill, or Marx, or any other 
writer. 

Socialists have for half a century emphasized 
a demand in their platform that labor shall re- 
ceive in compensation the full and true value of 
its toil. But no one has explained what that full 
and true value is, or how it may be ascertained. 
It has tacitly been assumed that the selling price 
to the consumer constitutes the true value of a 
product. But I have shown in this book that 
such a view indicates absolute ignorance of the 
true nature of value; it is the unreasoned no- 
tion of the man in the street. This is generally 
admitted by economists, some of whom openly 
confess that the question of value is as yet an 
unsolved problem in economics. 

Now good friends in the Socialist camp, the 
true value of an hour's or a day's labor is its 
product, and when exchange of products is neces- 
sary, which is nearly always the case, then the 
value of one hour's labor or product equals the 
value of one hour's labor or product in some 
other line of work, the labor in all cases being 
of standard efficiency, as minutely explained in 
part II. of this book. This, and this only, can 
give sense and meaning to your demand that 
labor be paid the full value of its toil. 

Socialists have been too much in the habit of 
preaching class hatred and indulging in denuncia- 
tions of individuals and of certain classes, espe- 
cially the capitalist or employing class, holding 



i8o NEW ERA SOCIETY. 

these individuals and classes responsible for all 
societary evils. These evils are rather the marks 
of an unfinished process of societary evolution, 
for which no individual or class of men can in 
justice and in reason be held responsible. It is 
time to discard such thoughts, and take a more 
comprehensive view of humanity's common strug- 
gle of evolving to a higher and better civilization ; 
the effort, in Tennyson's words, to 

Move upward, working out the beast, 

And let the ape and tiger die. 
It is time to realize that this ape and tiger in the 
human breast is not confined to a certain class of 
men, employers, capitalists, and landlords, but 
finds a lair in all breasts; and that it is the busi- 
ness of all men, first and foremost, to let die this 
ape and tiger in their own breast. 

Finally I will answer a question that has been 
put to me occasionally, and that may occur to 
many a reader ; namely : How is this equal com- 
pensation to be established in actual practice, who 
is to establish it, how is it to be brought about? 
This question might be answered by saying that 
equal compensation will establish itself in course 
of societary evolution without requiring con- 
scious and specific efforts to that end. And 
while such an answer perhaps would be the most 
correct and the most comprehensive that could 
be given, yet it is expressed in such general terms, 
and is so indefinite, that in most ears it would 
sound like an evasion rather than an answer. I 
will therefore answer more satisfactorily by 
specifying various ways in which the adoption, 
or at least approximation toward equal compen- 



FURTHER APPLICATION OF THEORY. i8i 

sation, can be, may be, and probably will be pro- 
moted. 

The first steps leading to such a consumma- 
tion are to create a moral sentiment in its favor, 
by proclaiming and preaching this gospel of 
brotherliness ; proclaiming it as something de- 
manded by an enlightened moral sense and judg- 
ment, as something demanded by an awakened 
social conscience. This book may possibly be the 
initial note, the beginning of such a call; and it 
will probably be followed by others, written by 
other men, variously intoned, but in the main 
sounding as a keynote equality of compensation 
for equal work; this meaning work of standard 
efficiency, no matter what the line of useful work 
may be. Quite a number of men will probably 
come forward proclaiming this as the only real 
equality of rights and of opportunity, the only 
genuine democracy, co-heirship, and brother- 
hood of men. For I am surely not the only one 
who holds such views; in fact I know there are 
others who think along similar lines; and some 
of these have perhaps already given expression 
to their thoughts. 

Next I expect every Christian pulpit to take up 
this glad tidings for the common man, this eco- 
nomic interpretation of the Nazarene's gospel 
of brotherhood and good will among men; this 
economic gospel that is to put men "at one" with 
each other, that is to lift up the weak and help 
them to their feet, instead of trampling them in 
the dust; that calls on each one to labor accord- 
ing to his gifts, without insisting on preference 
or demanding the chief seats at life's banquet 



i82 NEW ERA SOCIETY. 

table. It seems to me that every truly Christian 
pulpit would feel impelled to preach this economic 
millenium. 

Also it is to be hoped that the teachers of eco- 
nomics, if they feel that here is offered a rational 
and consistent theory of value which will elimi- 
nate much controversy from their science, that 
these then will endorse this value theory, and by 
such endorsement add the weight of their opin- 
ion to the sentiment for equal compensation. 

Then all up to date reform and labor organi- 
zations, it appears to me, will necessarily have 
to subscribe to this doctrine, and raise their voices 
in favor of the equal compensation idea. A re- 
fusal to do so would constitute moral suicide on 
the part of such organizations, as indicating a 
failure to align themselves with the world's evi- 
dent course of moral development. 

All these forces will combine in a powerful 
current of conscious sentiment, which will 
strongly influence private custom as well as pub- 
lic policy and legislative enactment, whenever 
these are called into action to modify or shape 
economic institutions and convention. This senti- 
ment will frown upon, and condemn as unjusti- 
fiable graft, excessive salaries of the ''higher 
ups," both in public and in private employment, 
and at the same time demand increase in the 
compensation of the men furthest down. It will 
influence, in a measure, private corporations in 
this matter ; but influence more especially all pub- 
lic works boards, and generally all public em- 
ployment, with the result of a continuous 
approachment toward equality of compensation. 



FURTHER APPUCATION OF THEORY. 183 

I have pointed out in Chapter VII. that there is 
even now a distinct movement towards equaliza- 
tion, though a very slow movement, and an un- 
conscious one; and I have cited a number of 
instances to support that assertion. But when 
this movement becomes one that is consciously 
advocated, demanded, and promoted, it may 
presently become quite rapid; especially so be- 
cause of wide extension of government control 
or interference with many production and 
distribution enterprises, brought about by the 
exigencies of the great war, in all countries af- 
fected by the same. Even aside from, and pre- 
vious to the war, interstate commerce and public 
service commissions have dictated travel, freight, 
and service rates; hours of labor and minimum 
wages rates; and now the railroads are wholly 
taken over, and we have fuel and food directors 
who control the distribution and price of coal, 
while Congress fixes the price of "wheat and 
sugar; and we hear threats of taking over alto- 
gether the coal mines and the packing houses, 
which would mean the arbitrary fixing bf meat 
prices and perhaps the price of live stock. 

To fix the price of a product virtually means 
control of the enterprise which puts that product 
on the market, and is equivalent to nationalizing 
such industry. All the nations involved in the 
great war have taken a very long step toward 
nationalizing their industries, a step which after 
the war they can retrace only in part if at all. 
Nationalization has gone on apace, and will con- 
tinue to go on, and with it the number and va- 
riety of government employes will increase to 



i84 NEW ERA SOCIETY. 

immense proportions; and the fixing of rates of 
pay becomes a more and more vexatious problem 
which calls more and more urgently for some 
definite principle upon which to base these rates, 
rather than to copy the rates prevailing in the 
world of private business, with these continually 
unsettled by disputes and strikes. 

What principle can that be but equality of com- 
pensation, the only one that will end the disputes 
and the strife? And with an ever increasing 
sentiment in favor of this, and a demand for the 
same, equality of compensation for all kinds of 
useful work of standard efficiency, will gradu- 
ally become an established fact. 

Whether men today like it or not, this is mani- 
fest social destiny. 

I now close my dissertation with the hope that 
many a reader may in these pages find food for 
thought. 



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